Down/Up, Down/Up, Down/Up, Down/Up

One host on CNBC earlier today noted that the market has gone back and forth between down and up days for the past 8 days now.  We checked the S&P 500's trading history to see how many times such an event has occurred, and it doesn't happen often.  Going back to 1928, the S&P 500 has had a down,up,down,up,down,up,down,up pattern just 42 times.  Below we highlight the 21 times that it has occurred since 1990.  For those interested, we also highlight how the index has done on the next day (day 9) as well as over the next week and month.  At least since 1990, the average change on day 9 has been positive at 0.24%, while the average change over the next week and month has been negative.  February 2010 was the last time this trading pattern occurred, and the S&P went up 0.42% on day nine.  It ended up flat over the next week but was up 6.52% over the next month.

(Note that three times since 1990, the index had the down/up pattern for 10 trading days -- 8/1995, 4/2002, 8/2005.  The index has never had the down/up pattern for 12 days.)

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