The Nasdaq Composite closed higher by 1% or more for a fourth straight session on Tuesday, a pattern that has occurred only 18 times in the index's history, according to Bespoke Investment Group. The same rally pushed the Dow Jones Industrial Average and the S&P 500 to all-time highs, even as the Nasdaq remains about 2% below its own all-time closing high.
The Nasdaq Composite closed higher by 1% or more for a fourth consecutive session on Tuesday, a streak Bespoke Investment Group says has happened just 18 times in the index's history. The gain came alongside a broader rally across the stock market. The Dow Jones Industrial Average and the S&P 500 climbed to all-time highs, helped by a decline in oil prices and strong earnings from Caterpillar and Palantir Technologies.
Bespoke's data shows the pattern has historically preceded more gains rather than a pullback. The Nasdaq has averaged a 1.6% gain one week after these instances and a 4.1% advance one month out. The returns build further to 9.6% after three months, 21% after six months and 29% after a year. According to Bespoke: "A move like this would normally have you expecting a pullback. History suggests otherwise."
This streak is unusual because it began with the Nasdaq already close to its highs, unlike most prior occurrences that came off depressed levels, Bespoke noted. The index closed at 26,584.99 on Tuesday, sitting about 2% below its all-time closing high. That record, 27,093.90, was set on June 2. The firm said it won't keep going up forever and flagged the 26,000 level as support to watch going forward.
Source: CNBC
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