April 21, 2011 NASDAQ Closes at 2007 Top
For the fourth time this year, the NASDAQ surpassed its 2007 highpoint. Yet, just as the three earlier days in February, todays price is just marginally higher. However, both the DJIA and the S&P500 are further behind the NASDAQ pace than in February.
The market has advanced now for three days in a row, replaying a sequence observed 223 times since 1950. Of those, 64 happened since the beginning of 2000. Most of these recent runs came while prices were rising, during the 2003 and 2009 recoveries. Nevertheless, during the turbulent 1970s, when the economy suffered the impacts of the oil embargo and a sharp surge in oil prices, stocks often registered this three gains in a row pattern.
Consequently, with the current escalation of oil prices, it is advisable to remember that scenario and the resulting decline in asset values.
The fact that the DJIA and the S&P500 continue to trail the NASDAQ recovery suggests that these indices could enjoy substantial gains. Markets, in general, level individual variations and tend to restore the price relationships that existed in the past.
Turning to tomorrow, in the past the DJIA managed a fourth straight gain at a near 60 percent rate. The NASDAQ ratio is smaller but still 55 percent positive. The S&P500, however, lagged behind showing more losses than advances.
DJIA .42 percent
NASDAQ .63 percent
S&P500 .53 percent