Today’s close -leaving the S&P500 just below its level of two days ago, when the latest seven-day positive streak ended- raises the question: will future gains be lower. How much, if at all, have these gains borrowed from the future?
Consider the price profile following three earlier runs this year. Our diagram plots price changes for the thirty days following seven-day positive closes. While each episode shows a somewhat different time profile, prices changes remain within a narrow range. They never cross the plus or minus one percent mark.
The first of these events (blue line), occurred in January. While it started with a strong surge, that moderated and at the end of the thirty day term the S&P500 had advanced one percent.
The next event (green line), came just 31 days later. It hovered near the zero change line before rallying, and then falling to close near its initial price.
The third, most recent happening (black line) began on July 12 with a similar sharp increase before turning down, losing near one percent 30 days after the initial seven positive day start.
This record provides an insight, suggesting that prices after this fourth seven-day upturn of 2013 will remain in the plus/minus one percent range for the near future.
Watch for further analysis of this unique chain of successive increases of the S&P500. That, for example, such streaks are a bull market phenomenon with seven repeats in the 2003/2007 expansion and four during the 1996/2000 upturn, while only one such incident happened during the last two bear markets.
DJIA .49 percent
NASDAQ .17 percent
S&P500 .27 percent
