May 31, 2011 Prices Up Again
Todays session moved prices higher for the fourth successive day only the 23rd such run since 2000, and the 83rd between 1950 and now. The diagram locates these previous 22 occasions with a red dot.
Clearly, this pattern favors periods of rising prices, since only four happened during the two bear markets. The other 19 clearly took place while prices were on the rise between 2003/2007, and as well since the current bottom in March 2009.
Further, note that these bear market runs stop at four gains in a row, whereas those posted during rising markets have a 50/50 chance of moving up to five gains in a row.
While this pattern provides insight into tomorrows market, the more important focus should be on the more distant future. Since the recent arrays of ongoing closing patterns are concentrated during periods of rising prices, the inference that prices will continue to move higher prices in the future seems justified.
DJIA 1.03 percent
NASDAQ 1.37 percent
S&P500 1.06 percent
