While the DJIA and the S&P500 moved higher for the second day in a row, the NASDAQ posted its fifth straight gain. Thus we focus on the NASDAQ today.
Our diagram reveals that the NASDAQ enjoys five up days in a row quite often – but more importantly, these take place more frequently during bull markets. The rate for the current expansion is 4.2 percent; that is a little less than once in 20 days. In contrast, five up days in a row happened only 2.2 percent during the 2007-2009 bear market.
Similar proportions are also the rule for the three previous up and down price cycles.
Similarly, on the following day, the NASDAQ moved higher more often during times of rising prices than when prices were trending down. Indeed, prices increased more often than one out of two days in good times.
Further, we see this history as confirming the bull tendencies of the current market.
DJIA .40 percent
NASDAQ .26 percent
S&P500 .51 percent
