October 6, 2011 Rally Posts Third Gain in a Row
Prices continued to move higher, rising near two percent, as the market closed higher for the third day in a row. Previously, since the beginning of 2000, 72 sessions posted three successive gains.
Further, this pattern shows a high correlation with a trend of rising prices. While only 12 of these days occurred during the two bear markets of the 21st century, the other 60 paired with the 2003/2007 and the 2009/today rising prices periods.
The next day, in the past, however, does not provide encouraging news for tomorrow. While the DJIA moved higher on 40 days, falling on the other 32 repeats, the NASDAQ, however, shows the opposite distribution, with 40 declines and 32 advances. Negative days also outnumber gains for the S&P500, 38 to 34.
Yesterdays projection for today was a rather weak expectation for further gains; it failed to anticipate todays strong showing.
DJIA 1.68 percent
NASDAQ 1.89 percent
S&P500 1.83 percent