Fun Facts from 2014 About Up and Down Days in the Market
10/29/2014 6:00 am EST
Technician Corey Rosenbloom of AfraidToTrade.com reviews the up and down days of this year, so far, because looking at just an “up day only” or a “down day only” chart can be helpful for spotting patterns and themes as they emerge and shift over time.
Like any year, 2014 has seen its share of ups and downs in the market (more ups than downs, actually), so I thought it’d be interesting to compare the up and down days for the S&P 500 (SPX) so far in 2014.
If anything, it’s a different way to see price and study the character of the market.
Let’s start with a special look at just the up days that have taken place so far in 2014:
While there’s dozens of methods to view charts, you’ve likely never seen an “up day only” chart.
Nevertheless, we can look at the frequency (number of up days in a row) and size of the up days in 2014.
Specifically, there have been 115 up days so far in 2014 (out of 203 days), which means that 57% of days in 2014 have been positive.
Taken together, the average of all up days in 2014 is 9.3 points in the S&P 500, with a Standard Deviation of 7.40.
Let’s compare that to the down days in the S&P 500 so far in 2014:
In terms of down days, there have been 88 down days so far in 2014 (out of 203 days), which means that 43% of days in 2014 have been negative.
The average of all down days in 2014 is higher at -11 points with a Standard Deviation of 10.53 points.
It shouldn’t necessarily be surprising that down days report a higher average and standard deviation.
Price tends to be more volatile—as we saw through October—when the index falls.
We can even see above that one-day sell events are more visually larger than one-day buy events.
Price more commonly falls faster than it rises.
We also see holes on the sell-chart, which is where price traded higher consecutive sessions to the upside.
The theme so far in 2014 involves the cluster of smaller, often consecutive up days against the backdrop of larger, less consecutive down days.
This type of comparison chart can be helpful for spotting patterns and themes as they emerge and shift over time as trend and volatility also change in the market.
By Corey Rosenbloom, CMT, Trader and Blogger, AfraidToTrade.com