July 1, 2011 Prices Move Up Again
A perfect week is a good summary to describe the five consecutive advances of the DJIA, the NASDAQ and the S&P500. While each of these averages, separately, has attained and even bettered five straight advances, there are only 33 other closes, since 1950, when all three, together, moved up for five straight days. Further, todays collective achievement is only the 10th since 1999.
Obviously, prices move higher during these episodes, yet unlike many other recent patterns that shared, or were contiguous with, significant up or down price trends, these five-in-a-row days fail to fit into such a relationship.
Note that the focus of the analysis so far is on a five-day run of all three indices. However, there are far more sessions than these nine when any individual index has achieved runs of five or more positive days in succession. During the past twelve years, the NASDAQ has posted 114 occasions with more than four successive advances. Similarly, the DJIA has 84 and the S&P500 closed with 77.
Another meaningful feature of the week is that the NASDAQ recovered and passed its 2007 high; it had reached this point earlier this year, in May.
Finally, yesterdays projection, of a price decline for today, missed the mark. As for the following day, the record shows more gains than losses, although a forecast based on nine observations is more conjecture than analysis.
DJIA 1.36 percent
NASDAQ 1.53 percent
S&P500 1.44 percent