Sharp increases of The DJIA and the S&P500 followed five consecutive declines. The DJIA exceeded today’s 1.26 percent advance on only seven days this year. The S&P500 has 13 days with closes higher than 1.12 percent in 2013.
Yet this performance has negative dimensions. The diagram locating the S&P500’s 13 strong closes this year, reveals that six of these days preceded significant market declines.
Another adverse factor comes from reviewing the incidents of these large S&P500 gains over recent bull and bear markets: they occurred more frequently when prices were tending down. In the 2007/2009 downturn, for example, one of every five days saw the S&P500 closing with gains larger than today’s 1.12 percent. In contrast, that rate in the earlier 2003/2007 expansion was only half that, averaging less than once every 13 days.
DJIA 1.26 percent
NASDAQ .73 percent
S&P500 1.12 percent
