Today’s advance, after Friday’s increase, makes this the sixth time in 2013 that these three averages moved higher two days in a row. The last repeat happened on April 10, just eight days ago. The positive string continued on the following day, just as it did on the previous recurrence, March 5. However, prices fell more often than they rose on the following day for the three earlier repetitions.
This pattern happens as often as one day out twenty, on average. Our diagram reveals an even more frequent occurrence, 1/12 days in the 2003 to 2009 period that covers a bear and a bull market.
Yet the frequency of positive next days shows a definite cyclical configuration. The two bear markets yield gains only 34 and 39 percent of the time, while the three bull eras show following day advances as high 60, 49, and 64 percent.
Thus two advances in a row occur far more often during bull markets than when prices are heading down. Accordingly, this history allows the projection and confirmation that prices will continue their move to higher levels.
DJIA .14 percent
NASDAQ .86 percent
S&P500 .47 percent
