Not roaring yet prices advanced again. So far, all of this weeks sessions moved higher. The gains for today are at 1.20 percent for the DJIA, and .94 percent for the S&P500. The NASDAQ came in third, with only a .74 percent increase.
The record shows 217 previous days with these indices three days in a row; 57 of these occurred since January 2000. However, the data reveal a not so good outlook for tomorrow: declines were more frequent than gains, except for the DJIA. It managed 33 increases and only 24 declines on the following day. The NASDAQ, on the other hand, scored only 26 gains, with 31 losing sessions. Similarly, the S&P500 shows 28 gains against 29 increases.
But the longer term outlook comes in favorably despite this negative tilt for the next day. The diagram reveals that the great majority of these three in a row closes took place when the market was moving higher. Just counting the frequency during bear phases 8 in the 2000/2003 years and 4 in 2007/2009 reveals that three in a row for all three indices favors good times.
Nevertheless, we find that this characteristic does not carry over to the proportion of next day happenings. It would be a comforting signal if indeed the day following had a concentration of falling prices during market declines. The data instead indicate that the proportion of declines is quite similar, regardless of the trend of prices.
As a result, counting the incidents of next day changes does not yield a projection for tomorrow. On the other hand, they do provide a long term outlook: three straight increases by the three indices are associated with long run trends of rising prices. Therefore, these recent price developments indicate that higher, rather than, lower prices will mark the near future.
DJIA 1.20 percent NASDAQ .74 percent S&P500 .94 percent