Four straight advances for the DJIA, the NASDAQ and the S&P500 are rare; there are only 36 such closes in the 4,400 trading days since 1996. With all but three happening during bull markets, the reasonable expectation is for the continuation of the current rally. We caution, however, the downside risk of higher interest rates, even though the market is downgrading the scare from the recent Fed’s new policy announcement.
Consider today’s diagram; it locates these four in-a-row advances, showing that 14 took place in the current recovery. The last such string happened just weeks ago, on April 11.
The NASDAQ continues to outperform the recovery of the DJIA and the S&P500. Today the NASDAQ closed at 276 percent of its March 2009 low, while the S&P500 stands at 244 percent and the DJIA lags at 234 percent of their bear market bottoms.
Note, however, that these disparate recapture rates have existed all during the last four years. Moreover, the NASDAQ advantage has accelerated during the year. In January, when it stood at 260 percent, the S&P500 had regained 235 percent; that was an 11 percent advantage. Today, that ratio has increased to a 13 percent lead for the NASDAQ.
DJIA .50 percent
NASDAQ .56 percent
S&P500 .72 percent
