Dow's loss ends eight-day streak of gains. What now?(Read article summary)
Although the current streak is over, the history of previous streaks suggests that markets have more room to run.
The Dow ended an eighth-day streak Friday with a 37-point loss.
But don't get too discouraged. If the history of Dow streaks means anything, stocks may well reach new highs in the days or weeks ahead.
Since 1970, the Dow Jones Industrial Average has had only 36 streaks when the average was up seven or more consecutive trading days.
These streaks typically come in bunches when the market is on a bull run. More importantly, since at least 1970, the market has always risen higher in the days and weeks after.
That suggests that in the short term, the market is likely to head higher from its 10741 close Friday. The previous up streak – an eight-day affair last August – saw the market move up 1100 points by early January before suffering a 7 percent correction.
The latest eight-day streak has propelled the market even higher.
But these streaks are, at best, short-term indicators. After a similar eight-day streak of gains in July 1987, investors who hung on for a month realized an additional 3.5 percent profit. Those who held on for three months lost a stunning 25 percent because of the "Black Monday" crash that October.