917 trading days since down 2% day

Wednesday, November 22, 2006 | 09:01 AM

A Trader friend emailed this:

It has been 95 trading days since we have had a down 1% close. This is 4.5 standard deviations from the historical norm, which means a one in 260,000 chance of happening without the intervention which we have seen.

It has been 917 trading days since we have had a 2% down day at the close.  This is 6.13 standard deviations from the norm, and the second longest streak since 1942. The odds of this happening without the Fed's intervention is one in 86,579,799.

It's great to know that your tax dollars are working hard to keep the financial system afloat. But what happens when the support stops, or an event overwhelms the ability of the Treasury to support the market? 

Paulson says that they have been able to inflate stock prices more than enough to offset the decline in the value of housing; but what happens when stock prices can no longer be pushed higher without running into foreign sellers of dollar assets? Are we going to buy back all of our overseas debt too?

Fascinating stuff . . .


Note: I received this a week ago, updated the days, but not the statstical odds. Also, I am not sure who the original author is -- if anyone can direct me towards that person, it would be appreciated.

Wednesday, November 22, 2006 | 09:01 AM | Permalink | Comments (49) | TrackBack (1)
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» Sedated trading as expected right before Thanksgiving day from Stock Trading Insights.Com
Major indices all closed in the green on a low volume day before Thanksgiving! Historically, the day before after Thanksgiving are usually bullish for stocks. Of course, volume also dries up since most of the big money are out of the market. A l... [Read More]

Tracked on Nov 23, 2006 5:31:09 AM


to change the "irrational" market phrase a little....

the fed can inflate (the market) faster than i can stay solvent

Posted by: MarkTX | Nov 22, 2006 9:18:24 AM

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