November 23, 2012 Strong Market Follows Thanksgiving Day
Prices surged, with the NASDAQ and the S&P500 posting their fifth straight advance and the DJIA moving higher for the second straight day. These gains following Mondays swell, closed a strong week; they point toward continued growth of the current expansion.
Though Mondays increases were larger, gains exceeding todays -the NASDAQ up 1.38 percent, the DJIA up 1.34 percent and the S&P500 plus 1.29 percent- happened only six other times this year. In fact, just 235 other closes surpassed this performance in the 3,241 trading days in this century.
But beware: the cluster of large advances accompanies falling price trends! Our projection of further gains results from the fact that only 7.3 percent of the days since the 2009 recovery posted gains as large.
The 2007/2009 decline had twice as many -nearly 14 percent of all closes- large increases, while the 2000/2003 drop had 10.5 percent.
In contrast, they accounted for just 2.8 percent of the days during the last, 2007/2009 bull market.
Our diagram details these facts.
As for Mondays prices, in the past the day following this pattern saw declines slightly more often than increases.
Further, there have been no discernible price changes in the sessions before and after Thanksgiving Day.
DJIA 1.35 percent
NASDAQ 1.38 percent
S&P500 1.30 percent