Prices recovered some 60 percent of their day before losses, and seemingly restored stability after the year’s largest sell off . . . and the vicious Boston Marathon bombing.
We focus on three features
Three features of today’s market action indicate strength, demonstrating that buyers are establishing long positions, rather than joining a down heading escalator.
First, consider that today is only one of 33 positive closes following a S&P500 loss deeper than (yesterday’s) -2.30 percent . . . in the 3,300 some trading days since the beginning of the 1996 expansion.
Second, today’s gain recovery rate of yesterday’s loss is 62 percent. Only nine days that managed to achieve that high a recapture level.
Third, the recovery rate of the DJIA is 60.3 percent and the NASDAQ’s gain of 63 percent are similar
Finally, consider the diagram that locates these days. Five of these events occurred near bottoms, before prices rebounded, whereas two happened prior to substantial declines. Yet today’s event, up there at the end of a long surge, does seem vulnerable.
DJIA 1.08 percent
NASDAQ 1.50 percent
S&P500 1.43 percent
