October 10, 2013 Large Gains as Bull Market Breaks Length Record
Prices increased more than two percent today, setting a new duration mark, on this the 1,155th trading day since its 2009 low. The longest previous bull market ended in October 2007, after 1,154 days.
Today’s closing pattern also deserves attention: the combination of two straight advances by the DJIA and the S&P500, combined with one positive day for the NASDAQ occurs more often when the trend of prices is up. Our diagram locates these days. While the proportions vary significantly, note that the 1996/2000 bull market’s frequency runs more than trhree times the rate in the following bear market.
Note that the record points to a favorable outcome for tomorrow: gains exceed declines about 2:1 in past bull markets.
Yet today’s large price increases cast a shadow on this favorable outlook. Large daily gains occur more often when prices are trending down, than during expansions. They amounted to four and eight percent of the last two bear markets, but this ratio came to just 1.2 percent, .4 percent and 2.2 percent during bull markets.
DJIA 2.18 percent
NASDAQ 2.26 percent
S&P500 2.18 percent
