Another, sharp decline followed Fridays drop, as the NASDAQ lost -2.01 percent, the S&P500 fell -1.35 percent and the DJIA gave up -1.16 percent. These two set-backs came after two positive sessions, which in turn trailed two advances. Consequently this defines the pattern as -2/+2/-2; however, another way of analyzing the current situation is by counting only the last four days – this yields a -2/+2 pattern.
The similarities of these two sequences make it useful to consider todays standing from both perspectives. The diagram differentiates these chains by marking the -2/+2 incidents with a circle, while the -2/+2/-2 circle includes that days decline in percent.
Todays close marks the 47th occurrence of the -2/+2 pattern, 28 of which came since 2000. The record shows the median loss on those days smaller than today; they are -1.09 percent for the NASDAQ and the S&P500, and -1.04 percent for the DJIA.
Fewer incidents exist of the longer -2/+2/-2 series; 9 overall with 6 since 2000. Further, these declines on average tended to be a lot smaller than todays decreases.
Consider the past incidents, and when they occurred, relative to upcoming changes in the trend of rising and falling prices. Obviously many came before price declines.
Yet quite a few developed at the bottom of troughs; these anticipated the end of a period of falling values.Therefore todays decline may be a sign that the current plunge is at an end.
DJIA -1.16 percent
NASDAQ -2.04 percent S&P500 -1.35 percent