AAII Home AAII Blog

Where the NASDAQ Is Less Likely to Close At

Investor-Update

Call up a one-year chart of the NASDAQ Composite index and you’ll notice a line of support and resistance around 4,900. Extend the chart to cover three years, and a second support/resistance line appears at approximately 4,600. Those support/resistance areas may not be not completely attributable to randomness.

The authors of a manuscript accepted by the North American Journal of Economics and Finance found evidence of barriers existing in the NASDAQ Composite (payment required). The index is less likely to close near a level ending “00” than at one further away. Rather, the theoretical most likely close is at a level ending in approximately “60.” Statistically, the NASDAQ has a higher chance of closing at, say, 4,560 then at 4,600.

No matter how the researchers tested the data, they came up with the same findings: the index is less likely to close within a 10-point range of a number ending between 95 and 04 (e.g., 4,595 to 4,604). Even rescaling the index values did not refute their findings. Future analysis might, but for the period of 1990 through 2012, the researchers give evidence to the existence of such “barriers.”

Read more »

 More on AAII.com

Not an AAII member? Join today

AAII Sentiment Survey

Pessimism pulled back after nearly hitting a three-year high last week while optimism stayed below 30% for a 12th consecutive week. More about this week’s results.

What’s Trending on AAII

  1. 16 Financial Ratios for Analyzing a Company’s Strengths and Weaknesses
  2. The Cash Flow Statement: Tracing the Sources and Uses of Cash
  3. Increasing Retirement Withdrawal Rates Through Asset Allocation

The Week Ahead

Several retailers will report earnings, including Dow Jones industrial average component Home Depot (HD) on Tuesday and fellow S&P 500 members Target (TGT) and Lowe’s (LOW) on Wednesday. A total of 50 S&P 500 member companies are scheduled to release their results.

The first economic report of note will be the February PMI Manufacturing Flash, released on Monday. Tuesday will feature January existing home sales, the Conference Board’s February consumer confidence survey and the December Case-Shiller home price index. January new home sales will be released on Wednesday. Thursday will feature January durable goods orders. January personal income and spending, January international trade data, the first revision to fourth-quarter GDP and the University of Michigan’s final February consumer sentiment survey will be released on Friday.

Four Federal Reserve officials will speak: Richmond president Jeffrey Lacker and St. Louis president James Bullard on Wednesday and Atlanta president Dennis Lockhart and San Francisco president John Williams on Thursday.

The Treasury Department will auction $26 billion of two-year notes on Tuesday, $34 billion of five-year notes on Wednesday and $28 billion of seven-year notes on Thursday. Additionally, $13 billion of floating two-year notes will be auctioned on Wednesday.

Read more »

This month’s AAII Journal features our famed Guide to the Top Mutual Funds. The guide provides in-depth analysis of nearly 1,600 promising no-load and low-load funds. Plus, you’ll learn how to select the best funds for your own portfolio. If you Join AAII Today for only $29, you will get this widely acclaimed guide for free. Barron’s calls it “one of the best [guides] around on the subject.” Start your risk-free AAII membership today to get the Individual Investor’s Guide to the Top Mutual Funds 2016, and to benefit from everything else AAII has to offer.

 

One thought on “Where the NASDAQ Is Less Likely to Close At”

  1. Dear Mr. Rodblut …. I am a new AAII Lifemenmber and just read this article in today’s investor update. It is interesting, but the underlying thesis proposed in the paper submitted to the journal is not true.

    I looked at the historical data. There are 5797 trading days between Jan 1 1990 and Dec 31, 2012. If the last two digits of the daily close are evenly distributed, there are 11 integers between 94 and 5 and you would expect 11% of the days to end with closes between xx94 and xxx5. There are 648 days that do so. That is 11.2%. So the hypothesis that closes in this range are unlikely is simply not true.

    I can mail the excel sheer to you to look at this.

    Rajeev Vaidya
    diyinvstr@aol.com

     

Leave a Reply

Your email address will not be published. Required fields are marked *