Monday, April 12, 2010

Another 1,000 Points Under the Belt

Another 1,000 Points Under the Belt: "

The DJIA has traded above 11,000 twice now in the past two trading days, which was a level that hadn't been seen since September 2008. While there has been no shortage of discussion regarding the market getting ahead of itself, the 159+ days that it has taken the DJIA to clear the 10,000s range is actually longer than any of the other four 1,000 point ranges it has already cleared since the March 2009 lows.

In the table below, we highlight the duration (in trading days) that it took the DJIA to clear various 1,000 point ranges on the way down during the bear market and on the way up during the bull market. For example, on the way down, the period of time that the DJIA last closed above 14K to its first close below 13K spanned a period of 21 trading days. If you think that was fast, the drop from its last close above 10K to its first close below 9K only took four trading days!

As is typically the case, the market's declines were a lot swifter than the subsequent advances. While it only took four trading days for the DJIA to clear the 9000s on the way down, on the way up it took 59 trading days. As shown, the only 1,000 point range where the DJIA was faster on the way up than it was on the way down was its move from 7,000 to 8,000. On the way down it took 69 trading days, while the way up only took 17 trading days.


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