January 12, 2012 Another Rare Array
Todays pattern is even more unusual than yesterdays: only one previous day closed with the NASDAQ up five times, the S&P500 posting four increases in a row while the DJIA scored a positive change after yesterdays decline. Yet that rarity is overshadowed by the magnitudes of todays changes.
Just 60 previous sessions, since January 2000 posted gains smaller than todays: the NASDAQ added .51 percent; the S&P500 increased .23 percent while the DJIA closed .17 percent than the day before. With more than 3,000 trading days so far in this century, these 60 closes represent only two percent of that total.
Further, consider the graph with a green dot locating these 60 sessions, todays combination occurs principally when prices are moving higher; this sends a clear signal that this unusual combination accompanies a trend of rising prices.
Yet a word of caution: it is troubling to see these closes concentrated before and after the October 2007 top. There is another near-the-top cluster in the current, since March 2009, trend, but prices maintained their upward trend.
Our projection for today, based on the history of yesterdays pattern, called correctly for higher prices. The outlook for tomorrow is negative, but cautiously so since the record shows just one previous close of this pattern.
DJIA .17 percent
NASDAQ .51 percent
S&P500 .23 percent