Why a Higher Close Today Would Have Bullish Implications for the Intermediate-term
By
Rennie on Thursday, September 17th, 2009 at 12:09 pm
Should the S&P500 finish in positive territory today, it would mark the ninth higher close in the past ten sessions, a bullish sign from an intermediate-term perspective. This type of persistent move means buyers have been in an unusually dominant position. While a short-term period of consolidation is not uncommon after such a long string of up days, history reveals a definitive tendency for the uptrend to remain intact over the next 10-20 trading days. Looking back to 1990, we find a total of 25 instances in which the S&P500 initially posted nine higher closes in the past ten sessions. Each of these instances is noted in the table below, along with the S&P’s performance both ten and twenty trading days later…
S&P500 Up Nine out of Past Ten Trading Days
04/16/07… S&P +1.0% in ten days, +2.4% in twenty days
11/17/06… S&P +0.6% in ten days, +1.5% in twenty days
10/31/06… S&P +1.1% in ten days, +1.6% in twenty days
10/25/06… S&P +0.3% in ten days, +1.7% in twenty days
07/20/05… S&P +0.8% in ten days, -1.2% in twenty days
07/15/05… S&P +0.5% in ten days, +0.2% in twenty days
11/05/04… S&P +0.4% in ten days, +2.1% in twenty days
09/08/03… S&P -0.9% in ten days, +0.3% in twenty days
09/04/03… S&P +1.1% in ten days, -0.8% in twenty days
08/19/03… S&P +2.4% in ten days, +2.4% in twenty days
06/04/03… S&P +2.4% in ten days, +0.8% in twenty days
03/25/03… S&P +0.4% in ten days, +5.1% in twenty days
11/27/98… S&P -2.2% in ten days, +2.8% in twenty days
10/22/98… S&P +5.1% in ten days, +6.9% in twenty days
06/17/97… S&P -0.4% in ten days, +4.7% in twenty days
01/22/97… S&P -1.0% in ten days, +2.1% in twenty days
11/15/96… S&P +2.6% in ten days, -2.3% in twenty days
09/16/96… S&P +0.5% in ten days, +2.9% in twenty days
05/01/96… S&P +1.7% in ten days, +2.6% in twenty days
02/08/96… S&P +0.5% in ten days, -3.4% in twenty days
09/07/95… S&P +2.2% in ten days, +2.2% in twenty days
02/24/95… S&P +0.3% in ten days, +2.6% in twenty days
10/21/92… S&P +0.4% in ten days, +1.7% in twenty days
01/02/92… S&P +0.2% in ten days, -1.4% in twenty days
05/08/90… S&P +4.8% in ten days, +6.7% in twenty days
The S&P was higher ten sessions later 84% of the time, significantly above the 58% random odds for a higher S&P ten days later. The S&P was higher twenty sessions later 80% of the time, also well above random. Even more interesting is the fact that on those occasions when the S&P was lower ten sessions later, it rebounded into positive territory by the twenty-day mark. Similarly, on those occasions when the S&P was lower twenty sessions later, it had already posted a gain after the first ten sessions. Put another way, in all twenty-five occurrences since 1990, the S&P closed at a higher level ten or twenty trading days later. When the market puts together a string of nine higher closes within a ten-day time span, it’s a bullish sign for the intermediate-term as strength begets strength.
Why a Higher Close Today Would Have Bullish Implications for the Intermediate-term
By Rennie on Thursday, September 17th, 2009 at 12:09 pmShould the S&P500 finish in positive territory today, it would mark the ninth higher close in the past ten sessions, a bullish sign from an intermediate-term perspective. This type of persistent move means buyers have been in an unusually dominant position. While a short-term period of consolidation is not uncommon after such a long string of up days, history reveals a definitive tendency for the uptrend to remain intact over the next 10-20 trading days. Looking back to 1990, we find a total of 25 instances in which the S&P500 initially posted nine higher closes in the past ten sessions. Each of these instances is noted in the table below, along with the S&P’s performance both ten and twenty trading days later…
S&P500 Up Nine out of Past Ten Trading Days
04/16/07… S&P +1.0% in ten days, +2.4% in twenty days
11/17/06… S&P +0.6% in ten days, +1.5% in twenty days
10/31/06… S&P +1.1% in ten days, +1.6% in twenty days
10/25/06… S&P +0.3% in ten days, +1.7% in twenty days
07/20/05… S&P +0.8% in ten days, -1.2% in twenty days
07/15/05… S&P +0.5% in ten days, +0.2% in twenty days
11/05/04… S&P +0.4% in ten days, +2.1% in twenty days
09/08/03… S&P -0.9% in ten days, +0.3% in twenty days
09/04/03… S&P +1.1% in ten days, -0.8% in twenty days
08/19/03… S&P +2.4% in ten days, +2.4% in twenty days
06/04/03… S&P +2.4% in ten days, +0.8% in twenty days
03/25/03… S&P +0.4% in ten days, +5.1% in twenty days
11/27/98… S&P -2.2% in ten days, +2.8% in twenty days
10/22/98… S&P +5.1% in ten days, +6.9% in twenty days
06/17/97… S&P -0.4% in ten days, +4.7% in twenty days
01/22/97… S&P -1.0% in ten days, +2.1% in twenty days
11/15/96… S&P +2.6% in ten days, -2.3% in twenty days
09/16/96… S&P +0.5% in ten days, +2.9% in twenty days
05/01/96… S&P +1.7% in ten days, +2.6% in twenty days
02/08/96… S&P +0.5% in ten days, -3.4% in twenty days
09/07/95… S&P +2.2% in ten days, +2.2% in twenty days
02/24/95… S&P +0.3% in ten days, +2.6% in twenty days
10/21/92… S&P +0.4% in ten days, +1.7% in twenty days
01/02/92… S&P +0.2% in ten days, -1.4% in twenty days
05/08/90… S&P +4.8% in ten days, +6.7% in twenty days
The S&P was higher ten sessions later 84% of the time, significantly above the 58% random odds for a higher S&P ten days later. The S&P was higher twenty sessions later 80% of the time, also well above random. Even more interesting is the fact that on those occasions when the S&P was lower ten sessions later, it rebounded into positive territory by the twenty-day mark. Similarly, on those occasions when the S&P was lower twenty sessions later, it had already posted a gain after the first ten sessions. Put another way, in all twenty-five occurrences since 1990, the S&P closed at a higher level ten or twenty trading days later. When the market puts together a string of nine higher closes within a ten-day time span, it’s a bullish sign for the intermediate-term as strength begets strength.