Here’s a look at some Historical Stock Market Trends for the Nasdaq 100 over the past decade plus, with the intent of looking at periodic large advances in prices over time.
We’ll have some observations at the bottom of this review.
Observations on historical stock market trends:
1) On a day to day basis, market movement can appear random, but trends tend to persist
2) Market movements can be symmetrical
3) Markets periodically follow seasonal, cyclical, or other patterns
4) Periods of consolidation will follow trending moves and vice versa
- The longer the period continues, the longer the potential following counter move will be
- This gets people used to certain market conditions and sets the stage for another type of market
5) Strong trends tend to stay above the 9 dma. Moderate trends will pull back to the 20 dma.
6) Markets tend to test revisit previous highs and lows as part of their movement
7) Markets tend to peak on strength, and bottom on weakness
8) Moving averages and trend lines will periodically provide support or resistance to the markets
9) Emotions such as over confidence, fear, greed and capitulation can be measured and should be considered
10) Computer algorithms make up a high percentage of trading, but at the end of the day are programmed by individuals and merely magnify the aggregate reactions of the market
Investment Research Group, Inc.