Gaining nearly two percent, the DJIA and the S&P500 outperformed the 1.46 percent NASDAQ advance. Not a usual combination understates its rarity: while the NASDAQ scored 439 increases greater than 1.9 percent since 2000, the S&P500 had only 157 and the DJIA managed just 143 closes. Furthermore, a total of 122 days in this century occurred with all three indices closing with today’s combination.
One need not be an optimist to interpret this upbeat result as confirmation that the rise in prices -interrupted after the April top– will continue.
Furthermore, the diagram shows these events cluster at the lower turning points of the last two cycles, enforcing the expectation of future rising prices.
Yet these data also support another, contrary projection. another v of thesThe fact most events Such intepretationStrenghtening
a look at the market circumstances surrounding each of these 122 events suggests caution. The diagram identifies these dates with a circle; the vertical lines separate the bull and bear trends.
That most of these ‘good’ events accompanied falling price trends is obvious. However, the current period, since the March 2009 recovery, has a greater proportion of this combination, 6.44 percent, than the 5.80 percent of the 2000/2003 bear market.
These statistics indeed are a shock turning apparent good news into a warning of possible price declines.
DJIA 1.96 percent
NASDAQ 1.46 percent
S&P500 1.93 percent