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Finally after eight straight advances the S&P500 declined; the DJIA also declined, after six gains in a row; but the NASDAQ moved higher for the second time. These changes however were quite modest. Indeed, only six other closes this small happened in this century, and is it coincidence that three were in the month of January?

Our diagram reveals most of these days were during the two boom phases, of 2003/2007 and since the last low of March 2009. That is comforting since this batching allows the conjecture that the current upswing will continue.

Yet the projection for tomorrow is not as comforting, because during these upswings in the past, prices on the following day declined almost as frequently as they increased.  However, most of these losses remained well below a full percent. On the other hand, prices increases of more than two percent were quite common when the market was in a bear mode.

DJIA                                   -.10 percent

NASDAQ                            .15 percent

S&P500                             -.18 percent

Yes, the S&P500 finally crossed the 1500 barrier on its eighth straight advance, but the DJIA actually performed much better so far this year. The DJIA added 3.60 percent in the last 17 trading days, almost a third more than the S&P500’s 2.78 percent. And note an oddity; both indices surpassed the NASDAQ; which added just 1.20 percent in the same period.

This DJIA advantage differs from the record, when its performance lagged both the NASDAQ and the S&P500. The average 17 days change, since the bottom of March 2009, is 1.26 percent for the DJIA, less than the NASDAQ’s 1.61 percent and lower than the 1.35 percent of the S&P500.

Similarly, during the 2003/2007 expansion, the DJIA’s 17 day average gain was .93 percent, lagging the S&P500’s .99 percent and the NASDAQ’s 1.2 percent.

These comparisons reveal the market’s torrid pace since the beginning of this year. However, the NASDAQ has nor shared this strength, though its recovery occurred much earlier. And with its recapture standing already at 112 percent of the 2007 top, this lag may seem a source of strength.

The outlook for the following day is less optimistic. But that should not be surprising, with the DJIA’s positive string now at six days; there are just five occasions when this index moved up seven days in a row.   

DJIA                                   .51 percent

NASDAQ                           .62 percent

S&P500                             .54 percent

Another advance for the S&P500 extends its string to six gains in a row. ‘Rare’ fails to do justice to this unusual string:  there exist only 12 other days, of the 3224 trading days, since the beginning of this century.

Further, looking at tomorrow, the S&P500 moved up seven days in a row only eight times in the past 13 years. The diagram shows seven of these took place during the 2003/2007 bull market, while another happened just as the market turned down in 2000.

The DJIA also closed higher today, extending its string to four advances in a row, while the NASDAQ scored its second straight gain. This, together with the S&P500’s sixth increase, yields a pattern seen on just three other days since 1950, with the last occurrence in September 1995.

DJIA                                   .49 percent

NASDAQ                           .33 percent

S&P500                             .13 percent

The S&P500’s fifth gain in a row -the first repeat since January 2010, and only the fifth time since 1950- is creating anticipations of its closing above 1500. Though that goal is less than 10 points above today’s close, the S&P500 has reached those levels only a few times. Further, all those closes happened almost immediately before the market collapses of 2000 and 2007.

Our diagram showing these days reveals prices declining almost in lockstep with daily gains; this makes a strong case, that in the past at least, for caution rather than exuberance when the S&P500 is above 1500.

Yet an optimistic interpretation is that this index, now just .5 percent below the 1500 threshold, held that territory more often in 2007 than in its previous, shorter stay just before the 2000 top.

DJIA                                   .46 percent

NASDAQ                           .27 percent

S&P500                             .44 percent

With the price recovery now in its 972^nd day, the dimensions of its longevity deserve consideration. Since the previous 2003/2007 bull market extended for 1,154 trading days, this simple comparison of just expansion days yields nearly another full year of rising prices.

That the S&P500 and the DJIA still remain below their 2007 highs supports this view. But their current recoveries of 95 percent and 96 percent of those earlier highs do not provide the stoutness as the simple number of days correlation.  Further qualm results from NASDAQ’s strength; it has climbed past the 2007 high, and now stands at 111.5 percent of that mark.

Given NASDAQ’s explosive history of the dotcom boom and bust, that even today it   regained only 63 percent of its previous 2000 high, this index is too volatile to provide a reliable baseline.

Yet today’s DJIA stands more than 2000 points above its peak of March 2000. That 123 percent gain surely deserves a second look.

Caution, as always, is the by word of successful financial management, and this history presents some somber facts for consideration.

DJIA                                   .39 percent

NASDAQ                          -.04 percent

S&P500                             .34 percent

Just 9 other days in this century have the same pattern as today: the DJIA down one day, the NASDAQ up one day and the S&P500 up for the second day in a row. Most of these closes in the past occurred while prices were trending up; but the next day’s activity was split evenly between advances and declines.

These three averages have gone substantially different paths in the year’s first 11 trading days. The DJIA gained more than 7 percent, with 7 advances and four losing days. The S&P500 and the NASDAQ, however, moved up less than one percent, adding .8 and .2 percent, from six advances and five declines.

Yet the DJIA is just catching up, given its 2012 performance of a mere 7.3 percent, while the NASDAQ added 14.0 percent last year and the S&P500 increased 11.7 percent.

DJIA                                   -.17 percent

NASDAQ                            .22 percent

S&P500                              .02 percent

We’ve titled today’s analysis with Yahoo Finance’s headline to reflect the current bull atmosphere. Yet there’s room for moderation. The S&P500 still remains below its October 2007 high, recovering just 94.6 percent of that top –now, some 971 days after the market bottomed out in March 2009. The DJIA recovery is only slightly better, at 96.0 percent. Both these averages have lagged, and continue to fall behind the NASDAQ which today reached 111.5 percent of its 2009 low.

Consider the record of 2007, after the S&P500 reached 1480.93, today’s close. It happened on April 20, then prices advanced even further topping 1550 in mid-July. Then the shoe dropped, prices plunged 10 percent by the end of August. The market then moved sharply higher, retaking that loss. But the recovery was short lived, before the second shoe dropped just days later. Prices continued to fall. It took 355 trading days to reach bottom, before values finally began the recovery we’re celebrating today.

DJIA                                   .63 percent

NASDAQ                           .59 percent

S&P500                             .56 percent

While the DJIA’s fourth advanced for the fourth day in a row, the NASDAQ failed to follow, closing lower after three up days; meanwhile the S&P500 declined for the second straight session. This pattern occurred just one other time -on April 15, 1993- in the last 60 plus years. We report this fact, but as so often in recent months, unusual combinations fail to provide reliable projections.

Profiling today’s DJIA gain with NASDAQ’s and the S&P500 losses, yields a history of 139 such days in this century.  Whereas 44 of these came during the 2000/2003 decline there were just six in the 2007/2009 drop. Again, the disparity -5.9 percent frequency in the first bear market and 1.7 percent in the second- leaves no room for conjecture.

Similarly, the two price expansions show different ratios, with 5.9 percent of the days since the 2009 bottom and just 2.4 percent in the prior 2003/2007 bull market.

Yet we share one optimistic feature: prices moved higher on the majority of next days, in good as well as bad times. The positive ratio was 53 percent between 2000 and 2007. It rose to 67 percent between 2007 and 2009. It declined a bit, to 60 percent, since March 2009.

But beware of the enormous range of past price changes on the following day. The S&P500 deepest loss was -3.7 percent but that was dwarfed by the NASDAQ’s drop of -12.7 percent.

DJIA                                   .14 percent

NASDAQ                          -.26 percent

S&P500                            -.09 percent