The NASDAQ led the market, gaining 1.63 percent the largest advance since the beginning of 2010. Taking second place today, the S&P500 increased 1.29 percent, its most extensive change in 18 trading days. While the DJIA shared this last high day, it closed up 1.11 percent.
A further encouraging feature of the day is that the three indices have recovered, and almost reached their previous highs recorded last Thursday and Friday.Todays pattern - of +2/-2 for the NASDAQ and the S&P500, and +2/-1 for the DJIA- is only the tenth in recent times, and the fifth since January 2000.
Furthermore, todays gains for the NASDAQ and the S&P500 exceed their average past gains for this pattern.
Projecting what might happen tomorrow, based on this record, yields a positive outlook, since they moved ahead on three of the last four occurrences.
Moreover, a watch on the frequency pattern of the S&P500 could prove fruitful. Its closes over the past four days feature two days of gains after two days of losses. There have been 85 of these up-two-down-two-days since 1990. Extending this series requires two successive losses for the S&P500 over the next two market days.
Yet the probability of seeing this continuation tomorrow and Monday, is far from overwhelming, since only 21 of these 85 went on to post an up-two-down-two-up-two-down-two series.
DJIA 1.11 percent NASDAQ 1.63 percent S&P500 1.29 percent