USMarketView

Bull markets and five straight gains for the NASDAQ go hand in hand.  Almost all happen when prices are moving higher.  Their count for the last three expansions stands at 80, whereas just 11 happened during the two previous bear markets.

Our diagram showing these days also displays the 54 succeeding sessions –orange-on-green- when the NASDAQ run extended to six consecutive positive days.  

Clearly these events signal that the current bull market should not be sold short.  Yet today’s strong plus indicator contradicts our last post that positioned Friday’s pattern as occurring before major price declines.

These opposing histories challenge forecasters to sharpen their tools while investors use their wits to be on the right side of coming price movements.

DJIA                - .30 percent

NASDAQ             .09 percent

S&P500            - .15 percent

The last time the NASDAQ advanced four days in a row while the DJIA and the S&P500 moved up twice was on May 15.  Then the market continued its move to new, record breaking highs.  This trend continues, with the S&P500 closing above 1700 just earlier this week.  Yet earlier repeats of this pattern happened near turning points.  While five occurred near lower turning points, foreshadowing long runs of increasing values, another five clustered just before -and shortly after- the October 2007 market top. 

Our diagram pinpoints these days. 

Turning to the following day, the S&P500 moved higher on eight of the next ten days in the past.  The DJIA and the NASDAQ have almost the same positive next day record, advancing seven times.

DJIA                    .83 percent

NASDAQ            1.36 percent

S&P500              1.25 percent

The S&P500 closed with a new, all time high of 1706.83, adding 1.25 percent today.  That up-beat news, though, comes with a negative connotation.  Daily gains this large and larger occur more often in bear markets than when prices are heading up.

Today’s diagram distributes all daily S&P500 closes above 1.25 percent over all recent bear and bull markets.  The heights of the graph’s columns reflect these frequencies as a percent of all trading days.  They account for 15 and 19 percent of the two bear markets.  The bull market proportions are 12, 6, and 13 percent for the expansions of 1996/2000, 2003/2007, and the present growth that began in March 2009.

As for tomorrow, the record shows prices continuing higher just about half the time in rising as well as falling markets.  Yet the median percent change is near .80 percent in bear markets, but declines to about .50 percent when prices are trending higher.

DJIA                    .83 percent

NASDAQ            1.36 percent

S&P500             1.25 percent

July 31, 2013                      July Remains Best Month of 2013

After a fast start in the first ten days of the month, prices leveled off.  Nevertheless, July gains still top all previous months of the year.  The S&P500 ended the month 104.3 percent higher than in June.

That is decidedly better than the drop in June – which came in at 98.5 percent of the May figure.  Yet July’s advantage over January, the second best month of 2013, is minimal.   That earlier gain amounted to 103.4 percent of the month before.

DJIA                   -.14 percent

NASDAQ             .27 percent

S&P500              -.01 percent