With prices hovering just below record highs one day, and just above record highs another day, the question of ‘where is this market going’ is on the front burner. Indeed, with this expansion now at 1,251 days setting a new length record every day, the question of ‘how long can this bull market last’ is most pertinent.
Yet we find today’s action yielding two opposite signs. The good news is the relatively modest gain of the S&P500. At just .3 percent, the record shows that advances this small occur more often in bull markets. The first diagram shows these small gains in rising and falling markets. They are near twice as common when prices are rising.
The negative indicator, shown on the second chart, considers today’s pattern of three gains for the DJIA and the S&P500 combined with a decline of the NASDAQ. It reveals this combination is far more frequent in bear markets; in fact, the ratio of bear to bull market occurrence is also around two to one.
The two faced position of these two indicators reflects the indecision of the current outlook, leaving future price formation in doubt.
DJIA .30 percent
NASDAQ -.25 percent
S&P500 .28 percent
