The DJIA ended its four day streak, losing -.38 percent, as the NASDAQ and the S&P500, suffered their second straight decline, dropping -.36 and -.69 percent. It was the 14th repeat of this combination since January 2000. Increases dominated the following day in the past; that count stands at plus eight and minus five. Furthermore, the record reveals only a single decline over the five recurrences since 2005.
No significant relationship exists for their timing over the last two growth and two decline phases. While four occurred during the 2000/2003 downturn, there were none in the 2007/2009 falloff. Yet the expansions incidents reveal some cluster, with the 2003/2007 upturn having six such sessions and with three in the current segment.
Todays diagram focuses on the course of the prices so far this year. We look at the relationship between changes in the direction of prices relative to the length of sequences of positive and negative runs in the same direction. The numbers on the diagram represent the number of days on which price changes have tracked the same up or down course.
Clearly, the minus one or plus one days as well as the minus two and plus two instances fail to reveal a correspondence between long lasting price trends even though such numbers arise only when prices move in the opposite direction of the day before. But the price path definitely changes its course when the string runs to six, or even five, days in a row.
However further quantitative studies are indispensable prior to using these changes as guides for short term projections or trading.
DJIA - .38 percent NASDAQ - .36 percent S&P500 - .69 percent