November 17, 2008
The indices lost more than two percent today, as they posted their fourth straight negative Monday. Until recently there was a near equal balance in Monday trading, with 19 upticks and 18 declines. Accordingly, these last four declining Mondays appear to be part of the steep reaction still hanging over trading.
The pattern of closes since last Wednesday, November 12, has been seen only twice in the past 60 years, with the three indices tallying a -2/+1/-3. That is shorthand for describing the two most recent closes as losses, that prices rose the day before, and that a string of three negative days occurred before then.
The record show just two other incidents of this pattern: one was at the end of 1981, when that bear market still had a ways to go before recovering; the other day, in November 2003, however, was part of a strong and long, recovery.
Moreover, on the following day in 1981, the averages gained about a half percent, while prices fell the next day in 2003. Accordingly, this descriptive information is not helpful in ascertaining what kind of changes are in store.
DJIA -2.63 percent
NASDAQÂ… -2.29 percent
S&P500 -2.56 percent