Prices moving higher for the fourth day in a row repaired some of the damages of the recent five and seven day declines at the end of June. Moreover, this sequence of positive closes justifies feelings for a favorable outlook; that the deterioration of late is only a correction rather than an end to the recovery.
Four day rising price sprees for these indices are rare; todays is only the 21st since 2000 and the 80th since 1950.
The figure displays the specific days, and gains, of the S&P500 on the previous 20 occasions when all three indices advanced four days in a row. With the vertical lines separating the bear and bull phases of the past ten years, they show quite clearly that these incidents accompany a trend of rising prices. Only three took place when values were falling. None were seen in the last, 2007/2009 decline. All the other 17 crossed the tape during the expansion of 2003/2007 or the current recovery.
That combination of outcomes justifies an optimistic outlook for the near term future. Yet the record reveals that the projection for Monday, the day following this surge, calls for declining prices. Note that the diagram plots these subsequent sessions, of the day after the four straight advances.
All three of the next day readings show falling prices during the 2000/2003 decline. The ratio of next day advances to declines, on the other hand, is split evenly between increases and decreases. With Mondays results yet to be determined, note that of the seven occurrences of the current expansion, we know only six next day results.
DJIA .58 percent NASDAQ .97 percent S&P500 .72 percent