Though prices closed below these record highs, it took just 76 days for the S&P500 to move from 1,700 to 1,800. That is just about three quarters the number of days for this index to move from 1,600 to 1,700; there were 105 days between the S&P500’s 100 point gain to 1,600. The previous 100 point advance, to 1,500, took 215 days.
Clearly, price gains are accelerating – that is the good news, yet cautious investors recognize that such step-ups tend to herald a slowing, if not an outright reversal.
Today’s configuration of four advances for the DJIA combined with one day declines of the NASDAQ and the S&P500 occurred just 11 previous times over the last five price cycles. All came during bull markets.
Our diagram reveals three of these happening 161, 138, and 59 days before the 2007 cycle peak. Whereas the two earlier repeats in this expansion came before prices escalated further.
This history shows that tomorrow holds an even chance for gains and losses.
DJIA .09 percent
NASDAQ -.93 percent
S&P500 -.37 percent
