February 25, 2009
The final bell found values lower than the day before as the indices failed to maintain their momentum. Such ricochets, with prices falling after they rose the day before are not uncommon. The record shows 421 of these since 1950, with 180 occurring after January 2000.
While their frequency is somewhat greater in years of falling prices, the differential is not very large at all: while 2.73 percent appeared when the market ended higher in December than in January.3.05 percent came in down years.
Moreover, searching for this pattern when the day before action yielded gains as large as yesterday, finds just eight such days. While only one of these occurred in an up market, in 1998, six have come since October 2008. .
In the past, substantial losses came on the following day, with the NASDAQ and the S&P500 dropping five times out of eight, while the DJIA suffered six losses.
DJIA -1.09 percent
NASDAQ -1.14 percent
S&P500 -1.07 percent