Closing up more than a full percentage point, the market moved in the same direction as the day before for the only time in the last five sessions. Todays pattern of two gains in a row, following a decline that came after a gain or +2/-1/+1 occurred on 33 previous closes in this century. In the past, the median gain for this pattern is above one percent, with the NASDQ having the largest median of 1.7 percent. Further, the maximum advance for this pattern exceeds five percent for the DJIA and the S&P500; it is 6.4 percent for the NASDAQ.
The diagram reveals, however, that prices on the following day declined almost twice as often as moving higher. Indeed, in a counter intuitive fashion, losses exceeded gains during each of the two bull markets, while upticks just about equaled losses when the trend of prices was down.
Further, most of the following day declines took place during the markets recovery, between 2003 and 2007, whereas higher prices on the next day has been the rule since the 2009 trough.
DJIA 1.26 percent
NASDAQ 1.04 percent
S&P500 1.27 percent
