May 10, 2011 Another Three in a Row for Three Indices
The beat goes on! Or are we jumping to an unjustified conclusion just because in the past prices were moving on an upward trend almost every time the DJIA, the NASDAQ and the S&P500 moved up in three consecutive sessions. A red mark identifies these three for three days on the diagram. Indeed, since its last occurrence, on April 21, just 14 trading days ago, the NASDAQ gained near two percent and the S&P500 rose 1.5 percent.
The scattering of the three for three closes when prices are on the move concentrate
With the prices of these three indices rising for the second session in a row, consider the characteristics of todays pattern. The record shows 206 repeats over the past 12 years these amount to 7 1/4 percent of the more than 2,800 trading days since December 2000.
Now, consider only those two-day pairs with gains equal to, or less than, todays changes of .36 percent for the DJIA, .55 percent for the NASDAQ, and .45 percent for the S&P500. The total number then reduces to just 21 previous pairs.
The result of this allocation reveals that just one of these 21 days has occurred when prices were declining, while the other 20 took place when the market trend was up. Seventeen took place during the 2003/2007 expansion, while three others before today- came after March 2009, the beginning of the current bull market.
Thus, the history of todays pattern reveals, just like yesterday, another likeness of the current market to times when prices were on the rise.
DJIA .36 percent
NASDAQ .55 percent
S&P500 .45 percent
