Losses ran deeper than on Tuesdays, just two days ago. The S&P500, down -1.68 percent suffered the biggest drop. But the NASDAQ at minus -1.63 percent, was not far behind. Both these indices, not turning in a positive close this week, experienced their fourth straight down day. The DJIA, after its microscopic .04 percent gain yesterday, lost 1.41 percent.
Though the DJIA pattern is -1/+1, because the insignificance of yesterdays advance, this analysis treats this index as if it also had four losses in a row. Ordinarily, we treat market changes as they are; our rule is to tell it like it is. However, allowing this change for these results provides a meaningful insight.
The diagram of the S&P500 closing prices since 1990 indicates all four-losses-in-a-row with a triangle. The vertical lines represent the dividing lines of the bear and bull markets. The proportion of the four in a row declines is at the bottom of each segment.
The two largest readings, .81 percent and 1.70 percent, took place during market declines, whereas the 2003/2007 expansion had only .43 percent four straight declines sessions. These differences indicate that four losses in a row are more common in falling, than in rising, markets.
But turning to the present expansion that started in 2009 we find that the current result cranks that ratio to .92 percent of its 323 sessions. Given the uncertainty of price expectations and the recent lack of direction in the market, this communality of proportion, of the ongoing market with the record, supports a cautionary attitude.
Note that most of the MarketView projections of this nature support expansion, whereas todays interpretation is only the second or third that is not consistent with expansion.
DJIA -1.41 percent NASDAQ -1.63 percent
S&P500 -1.68 percent