But, with a close in the green, DJIA’s longest streak since 1950 without three or more straight down days remains in tact and extends to 160 days.
To put DJIA’s current streak without three down days into perspective, there have been 969 occurrences since 1950 and the average time between those past occurrences is just 20 calendar days. The second longest similar streak last occurred in 1958 and it ended at 131 calendar days. When all occurrences were sorted by duration in between three or more straight down days a somewhat expected pattern emerged. Past occurrences in excess of 60 calendar days without three or more straight down days were predominately during periods of low volatility and in a bull market.
Like DJIA’s winning Tuesday streak, this streak to will eventually come to an end. In the following chart the 30 trading days before and 60 trading days after the streak ends have been plotted. The line represents the average percent change of all past streaks without three or more straight down days that lasted in excess of 60 calendar days. On average, the declines of the three or more down days in a row were recovered in about 20 to 25 trading days.
Click image to view full size...
By Christopher Mistal