US stocks notch a seven-day win streak
Wall Street had another positive day Wednesday – barely – notching its seventh straight winning session.
Since the streak began on Aug. 18, the Dow Jones Industrial Average has gained 4.5 percent. On Wednesday, it closed up 4 points to 9543. The seven winning sessions follow by almost exactly a month another seven-day streak that pumped the Dow up 9.4 percent.
Such streaks are rare. There have only been 35 of seven days or better on the Dow since 1970. As we've mentioned in the past, they tend to show up in bunches, usually at the top or bottom of markets. So the appearance of a second streak in the summer of 2009, within six months of a bear market low, shouldn't come as much of a surprise.
The Dow's recent climb also reinforces the pattern of previous winning strings: A month after a seven-day or better streak, the Dow has risen 28 times out of 34. The average gain was 3 percent. July's streak was followed by an August performance that was better than twice as good: up 7 percent.
What does this mean? If past patterns hold, the next few weeks should be buoyant.
But predicting stock performance is always tricky and, beyond a month, very difficult, technical analysts warn. For example: An eight-day streak in July 1987 boosted the Dow by 4 percent. But it was followed in October by “Black Monday,” the Dow’s worst one-day crash ever.
So enjoy the ride while it lasts. It won't last forever.
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