March 23, 2009
The DJIA, rose 6.84 percent to score its fourth largest increase in 60 years, and while the S&P500 beat that by increasing 7.09 percent, but this rank as only its fifth highest daily move. The NASDAQ moved 6.76 percent higher, which ranks as 15th from the top.
Its good news, of course, when the indices move higher by large increments, and especially in view of the up and down nature of daily changes, despite the similar, but somewhat larger advance of March 9, just some ten trading days ago. Yet it is not appropriate to consider these increases as proof positive that the markets decline is about to end.
Just about half of the DJIAs top gains, in the past, occurred when the direction of the market down. Indeed, its two strongest days came during this bear market, in October of last year, while its third largest close was during the 1987 decline. Similar conclusions apply to the NASDAQ and the S&P500; their strongest days come while prices are retreating; they typically coincide with a strong, but temporary and quite short reactions to a downward trend of prices.
DJIA 6.84 percent
NASDAQ 6.76 percent
S&P500 7.08 percent