Dow Stares Down Longest Losing Streak Since 2011

Stocks are trading lower this morning, extending last week's negative price action. Traders continue to take a risk-off approach, after the healthcare bill to repeal and replace Obamacare was pulled amid gridlock in Capitol Hill. Doubts surrounding the Trump administration's ability to follow through on other legislative measures, such as tax reform and infrastructure spending, has the Dow Jones Industrial Average (DJIA) down triple digits at last check -- on track to notch its longest losing streak in six years.

Specifically, the Dow has dropped seven days in a row, matching a similar streak in November. However, the last time the blue-chip barometer closed lower for eight straight sessions was in August 2011, around Black Monday 2011. And prior to that, it was October 2008.

According to data from Schaeffer's Senior Quantitative Analyst Rocky White, the DJIA has historically outperformed following a seven-session losing streak -- with the most notable returns occurring at the three-month mark. Per the chart below, the Dow has averaged a post-streak three-month gain of 2.7% versus an anytime return of 2% since 2010. Additionally, the big-cap index could seen an increase in volatility over the near term, per its higher-than-usual post-streak standard deviation.

Widening the scope, the Dow hasn't had a nine-day losing streak in more than 30 years. Specifically, the Dow Jones Industrial Average racked up an 11-day losing streak in early 1984, losing 4.7% over the course of the trading period. While the Dow was up 0.2% in the session that snapped the streak, it was 2.1% lower in the subsequent three-month time frame.

UPDATED 3/27/2017, 4:38 p.m.: It's official. With today's loss, the Dow Jones Industrial Average (DJIA) has now recorded its first eight-session losing streak since August 2011. Below are the returns following previous Dow losing streaks of this magnitude -- with the data showing slightly-better-than-coin-flip odds of a higher close tomorrow, but decent outperformance relative to "anytime" returns over one-month and three-month time frames.

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