May 26, 2011 Up and Down Continues
While the S&P500 today reached 84.7 percent of its highest previous close in October 2007, this index, as well as the DJIA and the NASDAQ, has been as high several times this year. The NASDAQ has reached an even higher proportion of the 2007 high; it has crossed the 100 percent market already, but continues to hover around 99 percent.
Note that the S&P500 at todays close is equal to its position in September 2006. It then took another 264 trading days before topping out in October 2007.
We know that stock prices in the past have routinely ended upturns at higher levels than their previous tops. Accordingly, taking that history as a basis, the long-term target for the S&P500 remains near 20 percent higher than todays closing price. Though a similar outlook seems reasonable for the DJIA, the fact that the NASDAQ has reached and surpassed its 2007 value. That veils its future; whether it will move proportionately with these indices or will fluctuate at todays level until the rest of the market catches up.
The market closed in line with yesterdays projection, based on the record of its closing pattern. The forecast for tomorrow, however, shows even odds for a further increase or a decline.
DJIA .07 percent
NASDAQ .78 percent
S&P500 .40 percent