Mar

7

The DJIA has now gone down for four consecutive weeks after an up (UDDDD), and the total decline is about -20%. Looking back 1929-present, this decline of 20% is the 7th worst out of 104 instances of UDDDD.

What usually happens next ? X for UDDDDX was insignificantly negative:

Variable    N     Mean     StDev   SE Mean     95% CI             T      P

nxt wk    103  -0.0028  0.0328  0.0032  (-0.0091, 0.0036)  -0.85  0.398

And regressing next week's return vs return of prior 4 weeks suggests bigger declines do not make for a better return (see scatter diagram ):

Regression Analysis: nxt versus dn 4

The regression equation is

nxt = 0.00799 + 0.142 dn 4

Predictor     Coef   SE Coef     T      P

Constant   0.0079  0.0053  1.50  0.136

dn 4         0.1415   0.0563  2.51  0.014

S = 0.0320660   R-Sq = 5.9%   R-Sq(adj) = 4.9%

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