The Dow Just Did This For the Second Time in Two Years

The Dow has done a great job of avoiding consecutive losses since the presidential election

Mar 3, 2017 at 2:17 PM
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Yesterday, the Dow dropped over 100 points. Nevertheless, Thursday marked the 21st straight trading day in which the blue-chip index did not post a back-to-back loss. Currently, the benchmark is modestly lower, meaning it could snap the impressive streak.

However, if the Dow reverses higher, it will extend its longest streak without consecutive losses since the late-2016 Trump rally, which ended on Dec. 22. Prior to that, you'd have to go back to 2014 to find a streak over 20 sessions. All 20 previous occurrences are listed on the table below, courtesy of Schaeffer's Senior Quantitative Analyst Rocky White.

djia streaks without consecutive losses

How does the Dow fare after snapping these hot streaks? White ran the numbers, and found the index tended to slightly outperform its anytime average over the short term, but by two weeks, began to lag.

djia streaks without consecutive losses

Two weeks after snapping the streak, the Dow averages a gain of less than 0.2%, with 40% positive, versus an anytime return of over 0.3%, with nearly three-fifths positive. The difference is even more stark one month out. The index's average post-streak return over this time frame is a loss of 0.1%, with only half positive. By contrast, the index has an anytime average return of 0.7%, with 62.2% positive. Long story short, Dow stocks could struggle over the new few weeks, if history is any indicator.

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