Today’s focus considers the closing pattern for each of the last six sessions. They come in series of two: two gains, following two losses, after two gains. There are only six such combinations on record in the near 4,600 trading days since 1996. (We focus on these closes because they include all the sessions of the last five cycles of rising and falling prices.)
Considering the age of the current bull market, the longest since 1996, the sharp declines of recent days, and the fact that prices continue in the same trading range over the past weeks, none of these past events occurred near upper turning points.
Further, the single close anywhere near a major change in the market’s direction, happened near a bottom. It came 15 days after the current bull market started on March 9, 2009.
It should not be surprising that prices declined on four of the following days. Yet these losses were quite small. On the other hand, the advances on the other two days ranged from .89 percent to more than three percent.
DJIA .55 percent
NASDAQ .29 percent
S&P500 .67 percent
