One Trend Down; One to Go?

May 20, 2009

It is neither a good thing nor a bad thing that has come to an end.  It is merely a string of numbers.  For the past ten trading days, the Dow Jones Industrial Average (DJIA) alternated between up and down closes.  Today we put in a second consecutive day to the downside and ended that roller coaster ride.

However, as many of you readers know, we still have a second trend in place, but it too is now facing extinction.  Since March 3, 2009, we have not seen three or more DJIA Down days in a row.  We may well see the end of that trend tomorrow.

The question -- and a large, looming one at that - is what did those two trends mean for investors, and what does the end of those trends signal?

I will stay true to my ongoing role here and not pretend to divine anything from the data or math.  I have persistently stated that I saw those trends as useful thermometers of the market and to that extent, we now seem to be cooling off the recent recovery.  On April 6, 2009, when I first published my market analysis, it was in reaction to what I thought were baseless "predictions" (if not "guarantees") that the then recovery from the March 9th market low was bogus and a trap. I saw no proof of that assertion and, to the contrary, I felt that the markets would continue moving higher. In fact, we stand some 5% higher than where we were on April 6th -- by that measure alone, I was right and the so-called market pros were wrong.

Still, tomorrow is another day. We are entering a pre-holiday trading session where many folks head for the sidelines and there can be tremendous volatility on relatively thin volume.  This has been a fascinating exercise for me, and I was heartened to hear from many readers about how my data persuaded them to stay long or to re-enter the markets. Now, we must watch and see whether there is a third down day on May 21st and what that may mean -- and how it is (or isn't) impacted by the end of the recent ten-day alternating closes.

Even I am intrigued by what tomorrow may bring.  We'll meet back here soon to read the tea leaves. Until then, happy and healthy holiday to all of you and your families.

Bill Singer

 

The Bill Singer Three-Day-Down/Occam's Razor Chart

http://BrokeAndBroker.com/3daychart.htm

DATE

DJIA

A/O 1/1/09 TICK TREND Net UP/DOWN

NOTES

             
20-May-09 8,422.04 -4.038% DOWN      
19-May-09 8,475.85 -3.429% DOWN  
18-May-09 8,504.24 -3.101% UP  1 -4 10
15-May-09 8,268.64 -5.785% DOWN -1 -5 days
14-May-09 8,331,32 -5.071% UP 1 -4 of
13-May-09 8,284.89 -5.600% DOWN -1 -5 one-day
12-May-09 8,469.11 -3.501% UP 1 -4 Trends
11-May-09 8,418.77 -4.075% DOWN -1 -5  
8-May-09 8,574.65 -2.299% UP 1 -4  
7-May-09 8,409.85 -4.176% DOWN -1 -5  
6-May-09 8,512.28 -3.009% UP 1 -4  
5-May-09 8,410.65 -4.167% DOWN -1 -5  
4-May-09 8,426.74 -3.984% UP 2 -4  
1-May-09 8,212.41 -6.426% UP   -6  
30-Apr-09 8,168.12 -6.931% DOWN -1 -6  
29-Apr-09 8,185.73 -6.730% UP 1 -5  
28-Apr-09 8,016.95 -8.653% DOWN -2 -6  
27-Apr-09 8,025.00 -8.561% DOWN   -4  
24-Apr-09 8,076.29 -7.977% UP 2 -4  
23-Apr-09 7,957.06 -9.336% UP   -6  
22-Apr-09 7,886.57 -10.139% DOWN -1 -6  
21-Apr-09 7,969.56 -9.193% UP 1 -5  
20-Apr-09 7,841.73 -10.650% DOWN -1 -6  
17-Apr-09 8,131.33 -7.350% UP 3 -5  
16-Apr-09 8,125.43 -7.417% UP   -8  
15-Apr-09 8,029.62 -8.509% UP   -8  
14-Apr-09 7,920.18 -9.756% DOWN -2 -8  
13-Apr-09 8,057.81 -8.188% DOWN   -6  
9-Apr-09 8,083.38 -7.896% UP 2 -6  
8-Apr-09 7,837.11 -10.702% UP   -8  
7-Apr-09 7,789.56 -11.244% DOWN -2 -8  
6-Apr-09 7,975.85 -9.122% DOWN   -6  
3-Apr-09 8,017.59 -8.646% UP 4 -6  
2-Apr-09 7,978.08 -9.096% UP   -10  
1-Apr-09 7,761.60 -11.563% UP   -10  
31-Mar-09 7,608.92 -13.302% UP   -10  
30-Mar-09 7,522.02 -14.293% DOWN -2 -10  
27-Mar-09 7,776.18 -11.397% DOWN   -8  
26-Mar-09 7,924.56 -9.706% UP 2 -8  
25-Mar-09 7,749.81 -11.697% UP   -10  
24-Mar-09 7,660.21 -12.718% DOWN -1 -10  
23-Mar-09 7,775.86 -11.400% UP 1 -9  
20-Mar-09 7,278.38 -17.069% DOWN -2 -10  
19-Mar-09 7,400.80 -15.674% DOWN   -8  
18-Mar-09 7,486.58 -14.696% UP 2 -8  
17-Mar-09 7,395.70 -15.732% UP   -10  
16-Mar-09 7,216.97 -17.768% DOWN -1 -10  
13-Mar-09 7,223.98 -17.688% UP 4 -9  
12-Mar-09 7,170.06 -18.303% UP   -13  
11-Mar-09 6,930.40 -21.034% UP   -13  
10-Mar-09 6,926.49 -21.078% UP   -13  
9-Mar-09 6,547.05 -25.402% DOWN -1 -13 4 days 
6-Mar-09 6,626.94 -24.491% UP 1 -12 of
5-Mar-09 6,594.44 -24.862% DOWN -1 -13 one-day
4-Mar-09 6,875.84 -21.655% UP 1 -12 Trends
3-Mar-09 6,726.02 -23.362% DOWN -5 -13

5/d 

2-Mar-09 6,763.29 -22.938% DOWN   -8 DOWN
27-Feb-09 7,062.93 -19.524% DOWN   -8  
26-Feb-09 7,182.08 -18.166% DOWN   -8  
25-Feb-09 7,270.89 -17.154% DOWN   -8  
24-Feb-09 7,350.94 -16.242% UP 1 -8  
23-Feb-09 7,114.78 -18.933% DOWN -3 -9

3/d 

20-Feb-09 7,365.67 -16.074% DOWN   -6 DOWN
19-Feb-09 7,465.95 -14.931% DOWN   -6  
18-Feb-09 7,555.63 -13.910% UP 1 -6  
17-Feb-09 7,552.60 -13.944% DOWN -3 -7  
13-Feb-09 7,850.41 -10.551% DOWN   -4  
12-Feb-09 7,932.76 -9.612% DOWN   -4  
11-Feb-09 7,939.53 -9.535% UP 1 -4  
10-Feb-09 7,888.88 -10.112% DOWN -2 -5  
9-Feb-09 8,270.87 -5.760% DOWN   -3  
6-Feb-09 8,280.59 -5.649% UP 2 -3  
5-Feb-09 8,063.07 -8.128% UP   -5  
4-Feb-09 7,956.66 -9.340% DOWN -1 -5  
3-Feb-09 8,078.36 -7.953% UP 1 -4  
2-Feb-09 7,936.83 -9.566% DOWN -3 -5  
30-Jan-09 8,000.86 -8.837% DOWN   -2  
29-Jan-09 8,149.01 -7.148% DOWN   -2  
28-Jan-09 8,375.45 -4.568% UP 3 -2  
27-Jan-09 8,174.73 -6.855% UP   -5  
26-Jan-09 8,116.03 -7.524% UP   -5  
23-Jan-09 8,077.56 -7.963% DOWN -2 -5  
22-Jan-09 8,122.80 -7.447% DOWN   -3  
21-Jan-09 8,228.10 -6.247% UP 1 -3  
20-Jan-09 7,949.09 -9.426% DOWN -1 -4  
16-Jan-09 8,281.22 -5.642% UP 2 -3  
15-Jan-09 8,212.49 -6.425% UP   -5  
14-Jan-09 8,200.14 -6.566% DOWN -6 -5  
13-Jan-09 8,448.56 -3.735% DOWN   1  
12-Jan-09 8,473.97 -3.446% DOWN   1  
9-Jan-09 8,599.18 -2.019% DOWN   1  
8-Jan-09 8,742.46 -0.387% DOWN   1  
7-Jan-09 8,769.70 -0.076% DOWN   1  
6-Jan-09 9,015.10 2.720% UP 1 0  
5-Jan-09 8,952.89 2.011% DOWN -1 0  
2-Jan-09 9,034.69 2.943%

UP

1 1  
31-Dec-08 8,776.39 0.000%     0  

ARCHIVED BLOGS ON THE THREE-DAY TREND:

 

          http://www.brokeandbroker.com/index.php?a=blog&id=161  (April 6)

          http://www.brokeandbroker.com/index.php?a=blog&id=164  (April 8)

          http://www.brokeandbroker.com/index.php?a=blog&id=166  (April 14)

          http://www.brokeandbroker.com/index.php?a=blog&id=168  (April 14)

          http://www.brokeandbroker.com/index.php?a=blog&id=169  (April 16) 

          http://www.brokeandbroker.com/index.php?a=blog&id=175  (April 27)

          http://www.brokeandbroker.com/index.php?a=blog&id=176  (April 29)  

          Forbes.com: Three Down Days? Then Stay Away!  (May 8)  

          http://www.brokeandbroker.com/index.php?a=blog&id=181  (May 11)  

 

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