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The fifth straight upticks of the NASDAQ and the S&P500, combined with a one-day loss of the DJIA, yields a combination seen only in bull markets. Today’s is the sixth since March 2009, since prices started the current expansion. There are just two others in this century, both during the previous bull market that ended in October 2007.
The diagram locating these days reveals that none of these happened near or close to the top of price expansions.

DJIA .25 percent
NASDAQ .64 percent
S&P500 .38 percent

Though the NASDAQ and the S&P500 extended their winning streak to four days, the DJIA lost ground, albeit just barely, closing down at minus .10 percent. Today’s diagram, plotting such closes over the past 5 price cycles, shows this pattern to be rare and also to be associated with rising prices.

One such incident occurred just one day after prices hit their 2000 top; another happened 90 days before the 2007 top. But in general, especially given this pattern’s infrequency, such closes fail to signal market turning points.

The last two incidents, in September and October of last year, resulted in higher prices on the following day. In general, however, the following days saw an even number of gains and losses.

DJIA -.10 percent
NASDAQ .23 percent
S&P500 .14 percent

Today’s focus considers the closing pattern for each of the last six sessions. They come in series of two: two gains, following two losses, after two gains. There are only six such combinations on record in the near 4,600 trading days since 1996. (We focus on these closes because they include all the sessions of the last five cycles of rising and falling prices.)

Considering the age of the current bull market, the longest since 1996, the sharp declines of recent days, and the fact that prices continue in the same trading range over the past weeks, none of these past events occurred near upper turning points.

Further, the single close anywhere near a major change in the market’s direction, happened near a bottom. It came 15 days after the current bull market started on March 9, 2009.

It should not be surprising that prices declined on four of the following days. Yet these losses were quite small. On the other hand, the advances on the other two days ranged from .89 percent to more than three percent.

DJIA .55 percent
NASDAQ .29 percent
S&P500 .67 percent

After two successive drops, prices moved higher and almost returned to last Thursday’s close. Yet they remain far below recent highs, returning to levels not seen since mid-February.

We have focused on the inordinate length of this growth trend. Now at 1,282 days, it exceeds the last bull market by more than 100 days; it is 223 days longer than the 1996/2000 expansion.

Yet, considering the total advance since 2009, this expansion seems moderate in comparison to the last two bull markets. Today’s diagram confirms this position. It shows the current S&P500 at 271 percent of its 2009 low; that is not significantly larger than the 255 percent gain achieved in 2000.

In fact, considering the average daily gain, today’s market has a lower rate than in 2000. Apportioning the current 271 percent advance by 1,282 trading days, yields .211 percent per day – that stands far lower than the .241 daily advance achieved between 1996 and 2000.

DJIA .91 percent
NASDAQ .57 percent
S&P500 .82 percent

Prices fell again, for the fifth decline in the last seven days. This negative chain started the day after the market scored its last record high on April 2. We believe these actual losses generate a near identical path of the time profile at the end of the last bull market, in October 2007.

Today’s diagram -updating the last one published just days ago- continues to document this parallel. Moreover, the length of the current expansion, now at 1,281 days compared to the 1,154 days of the 2003/2007 growth cycle, provides a further reason to the assumption that prices could turn down.

DJIA -.89 percent
NASDAQ -1.34 percent
S&P500 -.95 percent

Prices recovered today, ending the three day down streak. But considering the daily changes of the S&P500, note the three different highs in the last 53 days. The first was on January 15; then prices retreated, achieving a newer high on March 7; similarly, prices declined again, reaching their latest top last Friday, April 2.

We compare these price changes with the daily changes that occurred 45 days before the last Bull Market topped out in October 2007.

Our diagram shows the daily closes as a proportion of the highest prices. It reveals a significant parallel in these ups and downs. They are substantial, which raises the question: has this market topped out?

DJIA .06 percent
NASDAQ .81 percent
S&P500 .38 percent

Though prices declining for three successive days are rare, they occur just about as often in bull markets as when prices are heading down. The average frequency –as shown in the table- is near two percent. They happened as few as 1.5 percent of all days in the current expansion to as many as 2.3 percent in the previous 2007/2009 bear market.
Accordingly, this losing string in and by itself is not an early indicator of a general market decline.
Prices recovered on the following day, near 95 percent of the time. Our diagram shows just minor differences in the number of up and down days over good times and declining markets.

DJIA -.26 percent
NASDAQ -1.08 percent
S&P500 -.49 percent

The S&P500 suffered its worst decline since January 13. The NASDAQ’s drop was twice as sharp, ranking as the 33rd worse in the 1,276 trading days of the current expansion. The S&P500’s plunge ranks as the 119th worst since March 2009.

Today’s diagram shows the specific dates on which the S&P500 decline ranged from -1.25 percent to -1.48 percent, the latter losing ranking as the 90th worst performance. This history reveals that almost all of these days occurred when prices were bottoming out; just a few happened at market peaks.

Given the extended run-up that started last year, and the record length of this bull market, current concern is whether prices have reached their top and the history of today’s pattern surely does not substantiate apprehension.

DJIA -.96 percent
NASDAQ -2.60 percent
S&P500 -1.25 percent

While all three major averages moved up for the fourth day in a row, the S&P500 did so closing at a new high. This new record comes just 18 trading days after the previous top. That March 7 high came 35 trading days after the previous top of January 15.

Bull markets and four straight gains by the DJIA, the NASDAQ, and the S&P500 go hand-in-hand. Today’s diagram shows just three such closes during the near 1,100 days of the last two bear markets. It reveals this expansion’s large margin of four up days –some 1.4 percent of the 1,274 trading days since the last bottom of March 2009.

The good news revealing the market’s buoyancy just keeps getting better with every session. As of now, no end seems in sight to what is surely becoming the strongest expansion of recent times.

DJIA .24 percent
NASDAQ .20 percent
S&P500 .29 percent

Bull markets with rising prices characterize the combination of three gains in a row for each of the indices –the DJIA, the NASDAQ, and the S&P500. This pattern occurs more than twice as often in expansions than when prices are falling.

Note that six such closes happened last year. On the following day, the S&P500 moved higher every day, scoring four successive gains. The NASDAQ had just one decline, combined with six advances in a row. The DJIA trails, moving higher just three times.

Yet a caution is necessary since these days also cluster near market tops – see especially the many repeats near the end of the 2007 expansion. These totaled eight, with the last event crossing the tape only nine days before the market turned down.

DJIA .46 percent
NASDAQ 1.64 percent
S&P500 .70 percent