May 1, 2009
The week ended with almost a repeat of yesterday, because prices remained almost identical to Thursday. Yet todays changes, while small, were just about double yesterdays. Moreover, the DJIA as well as the S&P500 ended on the positive side. These indices each gained .54 percent whereas the NASDAQ was up only .11 percent.
The patterns of recent closes have one thing in common: they do not occur often. Indeed, without exaggeration, they are rare. Today, the NASDAQ was in positive territory for the third day in succession; at the same time the other two indices realized gains after yesterdays losses. This combination happened just 95 times since 1950, with just 18 in this century.
Yet todays changes are significantly smaller than those with the same pattern three plus days for the NASDAQ and just one for the DJIA and the S&P500- occurring since January 2000. Their median change is .85 percent for the S&P500, .81 percent for the DJIA and 1.08 percent for the NASDAQ.
The size alone of todays changes provides another exceptional dimension. Only two other closes exist one in 1976 and the other in 2004- with increases as small.
Considering what might happen on Monday, by extrapolating the pattern of changes in the past, yields a heavy majority for further gains. The record shows only three losses, compared to 15 gains for the NASDAQ. The S&P500 has six losses and 12 gains, while the DJIA comes in with seven losses and 11 gains.
However, if instead, only the sizes of todays upticks come into play, then the estimate is negative, for both of those events were followed by declines.
DJIA .54 percent
NASDAQ .11 percent
S&P500 .54 percent