January 13, 2011 A Small Decline


 

Following yesterday’s strong advance, prices fell, but not very much. Thus, the market returned to its earlier, since December, minor daily change routine. The NASDAQ lost -.07 percent, the DJIA declined -.17 percent while the DJIA fell -.20 percent.

Today’s pattern of  -1/+3  for the NASDAQ and -1/+2 for the other two averages has happened just ten times since 1950 with three in this century. However, extrapolating this history to project tomorrow’s changes, is a stretch, since the last two previous changes of all three indices range from -2.2 percent to  +1.71 percent.

Consequently, it would take a leap of faith to believe that today’s results come from the same universe s the past three years.  

With no projection for Friday’s market, note that the forecast for today, was based on a history of only seven previous closes. Hence while correct and on the money, that estimate as well could not boast much reliability.

 

 


DJIA                  - .20  percent

NASDAQ          - .07  percent

S&P500               -.17  percent

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