October 4, 2013 Week Ends Higher
Today’s gains added to Tuesday’s uptick beat this week’s three down days, resulting in net improvements of .34 percent for the DJIA, .53 percent for the S&P500 and .95 Percent for the NASDAQ. Nevertheless, the up and down pattern of the past six days requires attention. This combination -today’s increase, following two losses, after a positive day, which succeeded two previous up days- is rare. Nevertheless, history shows these to happening more often in bear markets than when prices are moving up.
Counting today’s close, the current expansion now has five such runs, while the previous, 2007/2009 decline had six. While not much of an absolute difference, consider their relative standing. These accounted for just .43 percent of this bull market’s days, but represented 1.69 percent of the previous bear market closes. The bear market frequency overpowers the current market by a factor of four.
Moreover, consider two other factors in conjunction with this frequency profile.
The age of the current expansion, at 1,151 trading days, exceeds the 1,059 days of the 1996/2000 bull market; it is just short of the 1,154 days of the previous 2003/2007 growth cycle.
Secondly, the S&P500 at this point stands at 250 percent of its 2009 low, almost as much as the 254 percent of the 2000 bottom, but substantially above the last bull market’s recovery of 195 percent.
DJIA .51 percent
NASDAQ .89 percent
S&P500 .71 percent
