May 17, 2011 Small Changes of a Distinct Character
Todays close, with the NASDAQ rising .03 percent and the other two indices falling, is the 15th repetition of this pattern in the last 12 years. Red dots identify these days in the graph of S&P500 prices during this period. Working from left to right, or the past to the present, the first combination came just ten days before the market turned down in 2000. The next instant occurred 22 days prior to the start of the coming bull market.
Moving forward, another such day preceded the October 2007 turning point by 107 trading days. Now notice how todays close perches at the highest price in recent months.
While the other 11 days with this pattern are not near major changes in direction, they nevertheless fit another design. They cluster. The four in 2003 have separations of 4, then 40, 25 and 22 days.
Similarly, in the current expansion, two incidents are 23 and 48 days apart, while it took 186 sessions for the next, or todays, happening.
Finally, the cluster in 2004 and the recent batch in 2010 share identical price brackets.
Obviously, the connections spelled out here could be nothing more than happenstance, yet given this caveat, attentiveness to the similarity of these sequences yields insight to the future.
DJIA - .55 percent
NASDAQ .03 percent
S&P500 - .04 percent
