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With the S&P500 down after yesterday’s advance, while the DJIA closed higher for the second straight day and the NASDAQ down for the third consecutive session, we have a combination seen just two other times since 1996. One of these happened just 20 days after the market turned down in March 2000. The other close was in the middle of the 2007/2009 contraction.

Our diagram includes the four additional instances of this pattern before 1996. It reveals that these, as well as the ‘since 1996’ events, did not foreshadow a major price change, nor begin or end, a bear or bull market.

Yet on the following day in April 2000, the S&P500 advanced 3.33 percent; in June 2008, the S&P500 dropped -1.69 percent. The NASDAQ changes were even larger: plus 6.57 percent in 2000 and minus 2.24 percent in 2008.

DJIA .20 percent
NASDAQ -.40 percent
S&P500 -.14 percent

Prices remain in a narrow band as the DJIA and the S&P500 moved up while the NASDAQ declined, falling for the second day in a row. Meanwhile prices continue to advance, scoring their 1,298th day of expansion since the March 2009 bottom.

Today’s pattern has occurred more frequently when prices were trending up in the early years of this century. More recently, however, that has changed; since 2007, this combination is evident more often when prices are on the decline.

Yet, as the diagram shows, prices moved higher on the following day more often during bull markets: in fact, advances on the next day outnumber declines two to one. In bear markets, however, declines outnumber gains on subsequent days.

We observe this pattern often at lower turning points, though it preceded the March 2000 high three times – 56, 22 and 18 days before prices turned down.

DJIA .72 percent
NASDAQ -.32 percent
S&P500 .56 percent

Prices moved up today with the DJIA and the S&P500 recovering from their two losing days at the end of last week. These closes, combined with the NASDAQ’s gain after its loss on Friday, yield a rarely seen pattern, but one equally common in bull and bear markets. Our diagram shows these closes with a concentration around the 2007 market peak, we note that three such closes happened just four days before the top, on the very day that prices scored their highest mark ever in October 2007, and also six days thereafter.

The S&P500 continues its fluctuation in the narrow range of 1,850-1,880 since March. Prices escaped this boundary just twice: the first time to establish a new high in April and also in their immediate decline thereafter.

On the following day in the past, prices moved higher just about as often as they declined; moreover this equality existed whether the trend of prices was up or down.

DJIA .11 percent
NASDAQ .34 percent
S&P500 .19 percent

With the NASDAQ scoring its third successive gain and the DJIA and the S&P500 losing ground for the first time after three straight up-days, we see a somewhat common pattern. The last occurrences were twice last November, one in September and one in June 2013.

These are more common in bull markets than when prices are heading down. Yet their frequency in the past three expansions is moderate, ranging only between .96 and 1.51 percent. The diagram shows many massed near turning points. Indeed one is at the top of the market on October 9, 2007.

Similarly, two happened 36 days and 9 days before prices turned down in March 2000.

This history leaves the outlook for tomorrow undefined: in the past gains on the following days were only a bit more frequent than declines.

DJIA -.13 percent
NASDAQ .31 percent
S&P500 -.01 percent

New highs deserve attention, yet bear in mind that the DJIA continues to lag behind the market. In fact, its close of 16,580.84 is just pennies above its previous peak on January 3. Then it closed at 253.22 percent of the 2009 bottom, while today new high achieved 253.26 percent of that low.

Yet consider two adverse facts that should tamper any celebrations. First, the DJIA has, and continues, to lag behind the NASDAQ and S&P500. As our diagram clearly shows, these two meters have outperformed the DJIA during this entire recovery. Today’s NASDAQ close is 324 percent of the March 2009 low while the S&P500 stands at 278 percent.

Further, with the NASDAQ close at 344 percent of its low on March 5, as well as the S&P500 close at 279 percent of that low, both indices now stand below their best performance this year.

The news from the Fed provides a further negative slant; its announcement today that it will reduce its monthly bond purchases by another $10 billion, is bound to have a negative impact on asset values.

DJIA .27 percent
NASDAQ .27 percent
S&P500 .30 percent

The DJIA and the S&P500 closed higher for the second day in a row while the NASDAQ closed up after declining the previous day, scoring a rare pattern seen on just 38 of the last 4,605 days. The diagram locates these events over the last five price cycles since 1996.

In actuality, these days occurred at a near equal rate during bull markets and while prices were heading down. Yet they have a distinguishing characteristic that is tied to the price trends: the median change of the S&P500 is positive in good times and negative when prices are heading down.

There is a further, yet coincident, fact: today’s changes for the DJIA, the NASDAQ, and the S&P500 are just about the same as the current upswing’s median changes since the beginning of this expansion in March 2009.

Another fact, today’s DJIA percentage gain is identical to yesterday’s rate. This is a unique coincidence – it has never happened before.

As for tomorrow, gains outnumbered losses during bull markets but prices declined more often in bear markets.

DJIA .53 percent
NASDAQ .72 percent
S&P500 .48 percent

Today’s diagram reveals the close relationship of the S&P500 and the Ten Year Treasury Note. Of course, these two separate wealth mediums should be highly correlated, but their prices are the inverse of each other. Yet their recent closes are succinctly parallel.

However, more important, is the near stability of these two prices. Could it be that the financial world’s caution hesitates to commit its portfolio until it becomes more familiar with the policies and initiatives of the new Federal Reserve Chairperson?

Similarly, could Janet Yellen be observing similar caution –and not implement new policy measures – until the market absorbs the possible impacts of the new Fed leadership?

DJIA .53 percent
NASDAQ -.03 percent
S&P500 .32 percent

Prices remained at a near standstill. The DJIA added $.01, the S&P500 gained .17 percent while the NASDAQ increased by .52 percent. Thus we focus today on the history of such small changes, concentrating on the S&P500’s daily gains less than .2 percent combined with NASDAQ advances in the .5 to .6 percent range.

Our diagram shows 22 such days over the 4,600 trading days of the last five price cycles. With all but four occurring during bull markets, prospects of still higher prices are promising. Nevertheless, the frequency of these days near the 2007 top demands precaution. In fact, one happened on August 22, 2007 – just 30 trading days before prices turned down. Further, the next incident was on November 5, some 19 days into the following bear market.

In view of these factors, note that February 11, some 50 trading days ago, closed with this same configuration.

Turning to tomorrow, consider that the record shows 22 advances, and only 7 declines, on the day following this pattern.

DJIA .00 percent
NASDAQ .52 percent
S&P500 .17 percent

Unsurprisingly the market backed off after six straight advances. Yet today’s DJIA and S&P500 losses were minimal with only the NASDAQ suffering a near one percent drop.

There have been just 38 such events since 1996, with all but two happening during bull markets. The diagram locates these, distinguishing between advances and declines on the following day. Unsurprisingly, declines outnumber gains more than two to one.

Remarkable, however, is the concentration of losses in the current expansion; since 2009, the following day experienced declines near three times as often advances.

DJIA -.08 percent
NASDAQ -.83 percent
S&P500 -.22 percent

The DJIA, now up for the second successive day, joins the market advance as the NASDAQ and S&P500 positive streak continues. It stands now at six positive days in a row, a combination seen just three other times since 1996. As discussed in yesterday’s analysis, these strings show no association with market tops.

Today’s diagram shows, though, one happening in June 2007, some 88 trading days before the market topped out on October 9.

Note the single occurrence in the current expansion last September – and that prices continued higher for another five days. Yet the following negative reaction soon faded, with prices thereafter continuing their move to higher levels.

DJIA .40 percent
NASDAQ .97 percent
S&P500 .41 percent