tsla

Why 2015 is a Bad Omen For the Dow's Weekly Win Streak

The Dow is on the brink of a sixth consecutive weekly winning streak

Dec 14, 2016 at 11:57 AM
facebook X logo linkedin


The Dow has been making a strong push toward the 20,000 level, resulting in dangerously high levels of optimism. Specifically, the blue-chip index has soared roughly 11% relative to its most recent bottom on Friday, Nov. 4. In fact, the Dow is currently on track for its sixth consecutive weekly advance -- a milestone that's been achieved just 22 times over the past 50 years.

Below, Schaeffer's Senior Quantitative Analyst Rocky White breaks down the implications of six-week win streaks on the Dow. The first chart provides the post-streak returns over different time frames, while the second offers the anytime data. White looked back to 1972 -- the year in which the benchmark first achieved the six-week streak.

dow win streaks 1 dec 14

As you can see, the post-signal returns are a mixed bag, especially short term. The three-month data, however, suggests the Dow's performance does tend to slow relative to its anytime returns. While the index has gained 1.2%, on average, after its six-week win streaks -- and been positive 54.5% of the time -- both figures are well below their anytime counterparts of 2% and 63.8%, respectively.

However, one trend that holds across all time periods is decreased volatility after the signal, as measured by standard deviation. In other words, it seems that the Dow, after a rapid run higher, tends to calm down considerably afterward -- as the stock market consolidates its gains.

Below, White breaks down the 22 previous six-week signals even further. Bulls should be praying against a repeat of the most recent occurrence. Last November, following a six-week win streak, the Dow fell off precipitously, losing 9.5% in the ensuing three months.

dow win streaks 2 dec 14

Let us help you profit from market volatility. Target big gains in short order with a 30-day trial of Schaeffer's Weekly Volatility Trader!

 

Two High-Octane Trade Ideas. One Simple Goal: Intraday Profits.

Dynamite Day Trading Signals delivers two same-day options trades every week — powered by proprietary intraday analysis and 43+ years of trading expertise.

But this isn’t just another stream of alerts.

It’s a structured plan with clear entry and exit points – designed for traders who want to act fast, trade smart, and wrap up gains before the closing bell.

No guesswork. No overnight exposure – Just two well-researched setups per week — whether you prefer buying premium or selling it.

And the results speak for themselves: subscribers have locked in +245.8% total profit over the last six months (since inception!).

👉 Start your one-month trial now for just $10, and be ready for the next trade alert.