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Today's 5.26% gain in the S&P 500 has placed it at the top of the recent downtrend which began on February 10th. It has traded lower in the channel highlighted below and has tested the upper limit several times today.
Can the market buck the trend? The chart below is excerpted from a Birinyi research bulletin this morning highlighting market performance on days that are up 3% by 10:00. Granted the chart is for the DJIA, but the composite indicates that on average the market closes at the high. (There have been eight such occurrences since 1990.)
It is probably too late in the day to place any bets on afternoon action, but a breakout above 715 for the S&P 500 might make for a comforting, stomach settling, rally.
Interesting post. The market doesn't look like it is up 3% by 10 am in your chart, though.
Posted by: Highgamma | March 10, 2009 at 02:32 PM
Highgamma:
The chart does not include gap openings.
Posted by: Cleve | March 10, 2009 at 04:47 PM
I think the market will bounce back once the 'corporate results' are out for the quarter ended March 31, 2009. Moreover the recent announcement from Fed that it will purchase all the 'bad assets' from banks, will help the market to move upward!!
Posted by: Mark | March 24, 2009 at 02:04 AM