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Market Oracle FREE Newsletter

Stock Market Trend Forecast Oct - Dec 2019 by Nadeem Walayat

Dow Has Fallen 8 days in a Row. Medium-long Term Bullish for Stocks

Stock-Markets / Stock Markets 2018 Jun 22, 2018 - 02:10 PM GMT

By: Troy_Bombardia

Stock-Markets

The Dow Jones has fallen 8 days in a row. But as always, market stage matters (the same kind of price action means different things in different market stages). The Dow has fallen 8 days in a row while it’s still in an uptrend (i.e. is above its 200 daily moving average). This is uncommon – most 8 days in a row streaks occur when the Dow is in a downtrend (i.e. is below its 200 daily moving average).


Here’s what happens next to the Dow when it falls 8 days in a row while being above its 200 daily moving average.

Here’s what happens next to the S&P when the Dow falls 8 days in a row while being above its 200 daily moving average.

Click here to download the data in Excel.

As you can see, the stock market tends to go up in the next 3-12 months when the Dow falls 8 days in a row while still in an uptrend.

Here are the historical cases in detail.

March 27, 2017

The S&P 500 rallied over the next 10 months before beginning a “small correction”.

May 9, 1989

The stock market rallied 5 months before starting a “small correction”.

January 18, 1968

The stock market was in the middle of a “small correction”. It rallied another 7 months.

July 19, 1963

The stock market rallied another 1.5 years before starting a “small correction”.

May 16, 1956

The S&P 500 was in the middle of a “significant correction” in this case. The Medium-Long Term Model doesn’t predict a “significant correction” right now.

Conclusion

The sample size of this study is small: only 5 cases. But this does support our other recent market studies, which suggest that the stock market will trend higher in the next few months.

By Troy Bombardia

BullMarkets.co

I’m Troy Bombardia, the author behind BullMarkets.co. I used to run a hedge fund, but closed it due to a major health scare. I am now enjoying life and simply investing/trading my own account. I focus on long term performance and ignore short term performance.

Copyright 2018 © Troy Bombardia - All Rights Reserved

Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


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