June 30, 2011 Fourth Consecutive Advance
The rally went into its fourth straight day as the second quarter came to an end. While unusual, today is the 84th repeat, and the 24th recurrence since the end of 1999. Red dots on the diagram identify these days.
Their distribution is consistent with earlier signals indicating that recent daily patterns happen more often when the price trend is rising. Note that only four of these four-in-a-row days took place during bear phases, while 19 came while prices were heading up.
Yet the odds are high that the market will not continue with gains tomorrow. The numbers on the graph, next to the red dots, show the price change of the S&P500 on the day after the fourth straight advance. While these were negative for all the falling price intervals, this trend continues in good times, with declining days outnumbering the ones with increases.
Note that yesterdays projection, calling for falling prices today, failed to materialize; and that we applied the same methodology for the coming session.
DJIA 1.25 percent
NASDAQ 1.21 percent
S&P500 1.01 percent
