September 19, 2008
The S&P500 scored its second four percent gain in a row; it now has put a 4.03 percent increase on top of yesterdays 4.33 percent advance. Accordingly, the S&P500 erased Wednesdays -4.71 percent loss.
Both the NASDAQ and the DJIA posted smaller, but parallel results: two large gains following a substantial loss.
A similar pattern occurred only once before: in 1987. Then all the indices dropped four days in a row, before posting two gains. At that time, the S&P500 lost more than -20 percent in one day, before gaining five percent and then ten percent in the subsequent two sessions.
At that time, after loosing about a quarter of their value, all three indices hit a bottom. (The NASDAQs loss was actually nearer a third.) Immediately thereafter the market recovered, and these days mark the start of the next bull phase.
While this week had two days of large losses, the last two days gains more or less led to positions not very different from a week ago. The NASDAQ moved up by .56 percent, the S&P500 gained .27 percent whereas the DJIA fell .56 percent .
DJIA 3.35 percent
NASDAQ 3.40 percent
S&P500 4.03 percent