• The Dow Is Up 9 Straight Days. Should You Sell Now?

    by  • March 14, 2013 11:32 am • Breaking News, Broad Market Analysis, Quick Hits, Study of the Week • 0 Comments

    The Dow is on a historic run here, up nine straight days.  The question on everyone’s mind is should they sell now?  After a huge run that has to be bearish, right?

    As Lee Corso likes to say, “Not so fast my friends.”  Going back to 1900, there have been 31 nine day winning streaks for the Dow.  Here they all are with the results afterwards.

    Sure enough, these actually aren’t that bearish.  In fact, a week later returns are pretty strong and a month later about average.  What really impressed me is  two months later the average return is +2.37% vs. the average return of 1.11%.

    Now something else that stood out is the Dow is up just 2.85% during this streak.  This is the weakest nine day streak since 1965 and the 5th weakest out of the 31 all time.  In fact, the average nine day win streak checks in at 5.27%.

    Breaking it down from here, we find that the stronger the nine day streak, usually the better the return going out two months.

    So there you go.  I don’t see much that is bearish from all of this.  It looks like strength begets strength, plain and simple.  Be on your toes here, but be aware that history says this incredible rally could still have legs.

    Lastly, at the time of this writing, the Dow is green and looking like it might make it 10 in a row.  Here are a list of all the times it make it up to 10 in a row.  For those wondering, the all-time streak was 13 back in ’87.



    Ryan Detrick is the Senior Technical Strategist at Schaeffer's Investment Research in Cincinnati, Ohio. He joined Schaeffer’s in 2003 and is a frequent speaker and writer on stock market and economic issues and is widely sought after by financial media for his expertise and commentary. Mr. Detrick is a common guest on CNBC, Fox Business, and Bloomberg Television and has been quoted in outlets such as The Wall Street Journal, BusinessWeek, USA Today, Reuters, the Associated Press, and others. With a decade of financial industry experience in the investment and financial services area, strengths include short-term trading with an eye toward timely technical- and sentiment-based trading opportunities, and advanced option trading strategies. Mr. Detrick received a BA in finance from Xavier University, an MBA in finance from Miami University, and has earned his Chartered Market Technician (CMT).


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