Today’s strong results stopped the run of the many recent negative sesions as the indices posted their largest increase in 13 days. Prices fell in 8 of the last 13 trading days. The NASDAQ led, rising 3.73 percent; the S&P500 moved 3.29 percent higher and, while trailing, the DJIA closed up 2.85 percent.
Our comparison with past patterns begins with the number of closes with greater percentage gains than achieved today. There are just 45, with 36 occurring since January 2000.
Yet note that the current session is the first positive day for all three indices. This additional screening yields cuts the count to 20 overall, and shows that 17 of these came since 2000.
The diagram shows the S&P500 closing prices since 2000, and a triangle identiffies those 17 incidents.
Importantly all coincide with falling prices. Note that this is the first occasion, of the many previously presented, which associates today’s pattern with decline rather than future advance.
On the other hand, though, a case can be made for increases; this view concentrates on the timing of these days relative to the bottom or end of previous declines. It is quite appearant that even if these
situations occurr when prices are falling, they are, however, clustered immedately before the lower turning point and another era of rising values.
DJIA 2.85 percent
NASDAQ 3.73 percent
S&P500 3.29 percent