Indeed, like the NY Knicks, the Markets have finally pieced together two consecutive winning days.
Since the decline that began on October 30th, the
S&P 500 has gone 19 days without having more than one winning session in a
I have been following this ever since my friend Paul first asked about what the failure to have two consecutive back-to-back winning days actually means. I was speaking with Mike Panzner about this earlier in the week. Mike noted:
• The longest such streak (since 1999) was the 24-day run that ended
on 9/21/01. The second longest streak was 22 days, which ended on 3/21/01. There
have been two other streaks of 21 days each, ending on 10/3/00 and 4/29/02,
• Except for the post 9/11 streak, which marked a climactic
V-bottom low in the equity market, other spans seemed to define the first
leg of a downdraft that "paused" for anywhere between 4 and 14 days before it
• Visually speaking, the pattern that developed when those prior
one-day-wonder streaks ended was a "flag," which in technical analysis terms,
often implies that a move — in this case, the downtrend — is about half-way
• For what it’s worth, the same also holds true for the two shorter
streaks of 16 days that ended on 1/28/03 and 4/1/05, respectively.
on past history, then, it seems that once the current streak ends ( i.e., we see
two or more winning sessions in a row), the risk is that it won’t be long before
the market begins another push lower.
I would add one item to Mike’s comments: The wild swings in the markets, +/- 2%, with violent up 200 or 300 point days don’t typically come in healthy Bull markets — these spasms are symbolic of Bear markets.