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Daily Speculations The Web Site of Victor Niederhoffer and Laurel Kenner Dedicated to the scientific method, free markets, ballyhoo deflation, value creation, and laughter. A forum for us to use our meager abilities to make the world of specinvestments a better place |
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The Chairman
Victor Niederhoffer
03/13/2005
After the 20-Plus Point
Decline, Then What?
Yes, the vigilantes are having a field day with all the negatives again after a down week. That is always the case when a week of down more than 20 points or 2% in the S&P 500 occurs.
Rather than joining with them in exacerbating positions against the drift I often have been known to take a position apart from their pessimism. And it's always good to count such meetings of David and Goliath, viz:
| Week of Decline | Change That Week | Next Week | 2 Weeks Later | 3 Weeks Later |
|---|---|---|---|---|
| 3/11/05 | -23 | ? | ? | ? |
| 1/11/05 | -27 | -2 | -15 | 6 |
| 8/16/04 | -39 | 2 | 33 | 10 |
| 4/30/04 | -34 | -7 | -2 | -2 |
| 3/12/04 | -40 | -13 | -1 | -38 |
| 9/26/04 | -39 | 34 | 12 | -5 |
| 3/28/03 | -30 | 15 | -10 | 23 |
| 2/17/03 | -24 | 6 | -10 | -6 |
| 1/24/03 | -43 | -6 | -24 | 6 |
| 1/17/03 | -23 | -43 | -6 | -24 |
Note that there have been about four declines of 20 or more a year since year-end 2002. In 2000, 2001 and 2002, there were some 20 declines of 20 or more each year. You be the judge.
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