March 16, 2011
U.S. Prices Fall Third Day While Nikkei Jumps 5.68 Percent
American prices lost near two percent, experiencing their worst decline since the beginning of the nuke crisis. In contrast, in Japan, home of the ongoing disaster, the Nikkei index gained 5.68 percent. Overall, however, losses of security values in Japan exceed, by far, our declines. The differential profile of price changes seems logical: losses vary directly with the distance-impact level of catastrophe.
Nevertheless, three straight declines of these three indices, happen rarely. Todays is just the 53rd repeat in the near 2,800 sessions since January 2000. They are distributed almost equally between eras of rising and falling prices. Yet the two declines had 2.02 and 2.25 percent of these three-day negative runs; while they amounted to 1.82 percent in the 2007/2009 decline and 1.57 percent of all closes since this recovery started in March 2009.
These numbers are too closes, and the differences too small, to conclude that three declines in a row by the three indices denote an early warning of future price declines.
On the following day, in the past, gains outnumbered losses by a ratio of 30:22.
DJIA -2.04 percent
NASDAQ -1.89 percent
S&P500 -1.95 percent