What's Next for the Dow?


The Dow’s winning streak—which seems likely to extend to 10 straight trading days—is now approaching historic proportions. In fact, if you are trying to think of the last time that the Dow has gone up so many times in a row, you may have to really search your memory.

That is because the last streak of nine days or more for the Dow came in 1996!

So in some ways we have been long overdue for a winning streak, as these types of events, while not common, do happen relatively frequently. Consider the following chart, courtesy of Bespoke Investment Group:

I think there are two particularly interesting things about this cool graph. First off, 13 days appears to be the post -WWII record for Dow streaks, so we could be nearing the end soon.

Second, the Dow’s performance following a big streak may be somewhat surprising to you as well. I for one thought that a big move to the downside would usually happen after a sustained number of up days in a row, but this hasn’t been the case in the past.

Instead, most of the time stocks have continued to move higher after the winning streak, with decent gains the overall result. In fact, the last big streak saw double digit three month gains in the following 90 day period, so at least according to Bespoke’s chart, there isn’t reason to panic just yet.

But what do you think?

Does this chart ease some of your fears regarding the Dow’s near-historic run, and can we beat the 13 day streak this time around?

Or, should we be worried that this streak has been so weak—from a price perspective—compared to the past ones?

Let us know what you think in the comments below!

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