April 24, 2009
The NASDAQ moved higher for the fourth day in a row, as the DJIA and the S&P500 joined the rally, registering their second successive gain. Furthermore, the NASDAQ gain of 2.53 percent is the largest of the week. The S&P500 closed up 1.67 percent and the DJIA rose 1.47 percent.
Continuing with the historical comparison of yesterday, this pattern, of four successive positive days by the NASDAQ while the other two indices scored two consecutive gains, has happened only 41 other times. Most occurred before January 2000, with just nine since then. Moreover, the rarity is in the combination. On their own, the individual indices have risen two or four successive days more often. The NASDAQ experienced 478 sequences of four straight gains; furthermore, the DJIA and the S&P500 records show more than 2000 incident of back-to-back positive closes.
Arranging these 41 happenings in terms of the stage of growth or decline of the market in the past four decades, we find little evidence that they have occasioned strong recoveries. Instead, 24 coincided with prices topping out, while only 11 came when values were rising. Moreover, this combination coincided with two market bottoms and four major declines.
Yesterdays forecast for today, based on the past, showed further gains far more often than declines. Indeed todays advances are consistent with the record. The scenario for the Monday, the next trading day, based on earlier experience, leads to an expectation of further advances. Previously these indices rose twice as often as they declined.
DJIA 1.49 percent
NASDAQ 2.55 percent
S&P500 1.67 percent