April 26, 2011 Fifth Straight Gain for NASDAQ
The NASDAQ advanced .93 percent to close at 2847.54, the second highest value since its last peak in 2007. Whereas it moved higher without pause since April 18, the DJIA and the S&P500 wobbled a bit, increasing today after yesterdays decline. Consequently the pattern at the end of the day is plus 5 for the NASDAQ and plus 1 for the DJIA and the S&P500.
This combination occurred just twice since the beginning of 2000, both incidents in 2000 June 21 and August 17- just after the market hit its top in March.
Therefore, the current outlook is two faced. The strong recovery of the NASDAQ, now just a few points below its 2007 peak, indicates higher prices as the rally continues. Yet, with todays pattern repeated just twice in the last 11 years, and both times happening just as the market was entering a three-year decline, suggests that prices may decline.
Thus the record poses a puzzle: will the NASDAQs continuing rise, now a mere 12 points below the 2007 high, continue into higher prices, or will prices trend down, just as before, given the repetition of the pattern last occurred as prices were heading down.
DJIA .93 percent
NASDAQ .80 percent
S&P500 .90 percent