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Strategies & Market Trends : Classic TA Workplace

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To: AllansAlias who wrote (50164)	8/15/2002 11:20:39 AM
From: John Madarasz	Read Replies (2) of 209892

The Dow on Wednesday gained 3.1% after losing 2.4% on Tuesday. Here's a table that shows how the Dow has performed in the last 8 trading days. Date Day DJIA Net Net% 08/05/2002 Mon 8043.63 -269.43 -3.241 08/06/2002 Tue 8274.09 230.46 2.865 08/07/2002 Wed 8456.15 182.06 2.200 08/08/2002 Thu 8712.02 255.87 3.026 08/09/2002 Fri 8745.45 33.43 0.384 08/12/2002 Mon 8688.89 -56.56 -0.647 08/13/2002 Tue 8482.39 -206.50 -2.377 08/14/2002 Wed 8743.31 260.92 3.076 This sort of volatility hasn't been seen in the Dow since the 1930s (other than last week's occurrence.) Q: How has the Dow performed after gaining more than 2.75% on a day in August following a 2.0% or greater decline? A: We've seen 9 prior occurrences of this event starting as early as August of 1896. The most recent event was last week. As the data table below illustrates, the market has tended higher in the wake of this event over the course of the next month. By 16 trading days later the market was higher in all cases by an average of 11.9%. Date Day t+1 t+6 t+11 t+16 08/13/1896 Thu 1.185 0.593 1.679 14.257 08/06/1903 Thu -1.459 6.969 4.234 7.415 08/24/1915 Tue 1.998 3.440 3.554 3.339 08/12/1929 Mon 0.826 4.711 6.453 8.111 08/03/1932 Wed 2.422 18.344 16.678 25.919 08/15/1932 Mon 3.608 8.450 11.713 20.177 08/17/1933 Thu -0.987 5.811 4.391 4.320 08/06/2002 Tue 2.200 5.671 NaN NaN 08/14/2002 Wed NaN NaN NaN NaN Avg 1.224 6.749 6.957 11.934 AvgPos 2.040 6.749 6.957 11.934 AvgNeg -1.223 NaN NaN NaN PctPos 75.000 100.000 100.000 100.000 PctNeg 25.000 0.000 0.000 0.000 Maximum 3.608 18.344 16.678 25.919 Minimum -1.459 0.593 1.679 3.339 StdDev 1.729 5.243 5.335 8.523 ZStat 0.708 1.287 1.304 1.400 Variance 2.988 27.491 28.467 72.636 9 Occurrences

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