The three averages moved higher for the second day in a row, creating an optimistic outlook. Not only were their advances solid, but in addition, the resulting pattern is characteristic of bull markets. Todays close is this configurations 217th repeat since January 2000. Most of these, some 68 percent, happened during the expansions of 2003/2007 and since the March 2009 trough.
Though we characterized todays advances as strong and only 23 percent of all positive closes in this century are larger- they are merely half the size of the average gain for this pattern during the two previous declines. The mean increase during market fall-offs for this pattern is 1.42 percent for the DJIA, 2.32 percent for the NASDAQ and 1.62 percent for the S&P500. They average just .88 percent, .80 percent and 1.16 percent when the bulls are in charge.
Identical good news holds for the following day, with near 60 percent closes moving higher during the two expansions, while these average only 36 percent during bear markets.
DJIA .87 percent
NASDAQ 1.46 percent
S&P500 1.15 percent