Prices closed up more than 2.4 percent for the DJIA, 3.2 percent for the S&P500, and 4.1 percent for the NASDAQ. These advances follow similar strength just three trading days ago, last Thursday; gains in excess of 5.8 percent just two days earlier, on Tuesday; and an earlier near 2.8 percent move on March 4.
Such momentum is spreading hope that the downturns end is in sight. Indeed, the market has made extraordinary gains since touching the latest and deepest bottom earlier this month.
Yet searching the recent record, reveals that last October saw a similar set of gains, achieved over 20 trading days. Unfortunately that upward momentum did not continue, and prices then fell substantially, despite their 25 percent decline in the previous two months.
The situation on the day subsequent to a +1/-1/+4 run, or a pattern of an up day following a down day that occurred after four straight gains, is not definitive. In the 20 repeats since January 1950, the DJIA shows only eight positive follow ups, while the S&P500 has twelve and the NASDAQ has thirteen gains but only seven declines on the next day.
DJIA 2.48 percent
NASDAQ 4.14 percent
S&P500 3.21 percent