The three indices continued their recent repetitions of minor changes; their pattern now stands at six advances in a row for the NASDAQ, two for the S&P500 and just one for the DJIA. Just two other sessions have this record, and both go back to the 1990s. Clearly, these provide no insight on our future, given their rarity and their age.
Instead, we focus on the relationship between the size of daily changes and the overall direction of the market. First, note that the variance of daily changes systematically with the direction of prices. Furthermore, considering these pairings over the past ten years, reveals that large daily changes occur mostly during periods of declining prices. On the other hand, when prices are rising, the daily changes of these indices not only are small, but they are significantly smaller than the price variations during declines.
Thus, turning to the future, it seems reasonable to expect that the current spate of small changes indicates a trend of rising prices.
DJIA .12 percent
NASDAQ .41 percent
S&P500 .37 percent