The Dow is About to Make History

Another all-time closing high in 2017 would be a record for the Dow

Dec 19, 2017 at 10:04 AM
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The Dow Jones Industrial Average (DJIA) on Monday notched its 70th record high in 2017, tying 1995 for the most in one year. And with a couple weeks left before we flip the calendar -- not to mention the index taking off in early trading today, ahead of an expected vote on tax reform -- there's a good chance this year will go down in history for the blue-chip index. Further, the Dow and the S&P 500 Index (SPX) are both eyeing their ninth straight monthly gains -- a feat not accomplished in decades for the stock market.

2017 Could Be One for the Dow Record Books

Should the DJIA tag another all-time closing high today, it will mark the 71st of the year for the index -- a new record. Meanwhile, the SPX just notched its 62nd record close of 2017 on Monday, and if the broad-market barometer can score three more before January, it will tie the most in one year since 1964 -- the second-best year on record. The current record can't mathematically be defeated before 2018, with 77 all-time closing highs accomplished in 1995.

Dow, SPX Eye Longest Monthly Win Streak in Decades

There have been just five nine-month winning streaks for the Dow, the last ending in November 1958 -- before Alaska and Hawaii were U.S. states, and prior to Fidel Castro taking power in Cuba. The SPX, meanwhile, has enjoyed just four nine-month winning streaks ever, the last ending in April 1983 -- two months before Sally Ride boarded the Challenger, and preceding Michael Jackson's Thriller video.

Dow after 9mo win streak

SPX after 9mo win streak

Stocks Could Rally Into 2018, If History Repeats

Historically, strength tends to beget strength for both the Dow and SPX. One month after a nine-month winning streak, the DJIA was up 2.53%, on average -- more than four times its average anytime one-month gain of 0.63%. Three months and one year after, the Dow's average return was also roughly twice its anytime return, and the index was higher 100% of the time.

dow returns after 9mo win streak

The S&P 500 Index was up 75% of the time at each checkpoint after a nine-month winning streak. One month later, the S&P was higher by 2.65%, on average, compared to its average anytime one-month return of 0.68%, looking at data since 1935. It's the same story looking all the way to one year out, with the SPX higher by 16.55%, on average, after a nine-month win streak, compared to 8.32% anytime.

spx returns after 9mo win streak

If past is prologue, the bull market could continue deep into 2018, should the major stock market indexes end 2017 with a bang.

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