Lower prices opened the week: the DJIA and the S&P500 fell for the third consecutive session while the NASDAQ closed lower for the second day in a row. Yet the September market shows just four losing days for the DJIA and the S&P500, with three hitting in the last three days.
Our diagram shows today’s closing pattern occurring three earlier times in 2013, in May, June and August. All told, in this expansion, since March 2009, two happened last year while 2009 had another two. While rare –with just 20 since 1996- 17 took place during the last three bull markets.
Though the record shows this combination associated with rising prices, we see a caution signal given the fact that three occurrences were near market tops. The last one was 94 trading days before prices turned down in 2007; while there were two others 112 and 94 days ahead of the 2000 bear market.
Yet with just these few data points, this falls far short of a confident projection. Nevertheless, since a quite recent close showed a similar association with the end of bull markets, this tendency deserves attention.
DJIA -.32 percent
NASDAQ -.25 percent
S&P500 -.47 percent
