September 23, 2008
After a positive start, by early afternoon, gains turned to losses, and while prices recovered some, they dropped again at the close.
We continue to show the similarity of the price pattern these last days with that occurring immediately before the precipitous decline of 1987. Todays result maintains the parallels described over the past two days, in that there are now two negative days following two positive closes. While the losses were quite slight in 1987, on the next day they dived to minus eight percent.
But when considering only the past four days — that is, two declines after two increases– and how these developed in the 21st century, the outlook changes. There have been 24 such sets, as shown in the diagram.
Five of these came during the market decline of 2000 to 2003; another four are part of the current downturn. The other fifteen happened during the price appreciation days of 2003 to 2007. Moreover, the positive nature of this -2/+2 pattern comes through clearly when there is a temporary pause in the upward market. There are just five repeats when price shift into reverse. The other ten incidents occur when the market is solidly on its upward growth trend.
DJIA -1.47 percent
NASDAQ
-1.18 percent
S&P500 -1.57 percent
This entry was posted on Tuesday, September 23rd, 2008 at 12 052008000000Tue, 23 Sep 2008 17:53:31 +0000 and is filed under Market Report. You can follow any responses to this entry through the RSS 2.0 feed.
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