Dow's six-day rally is first since 2007
On Monday, the Dow rose 104 points to close at 8848.15, capping a huge 9 percent rally since its last down day on July 10. Is the market trying to tell us something?
A six-day-or-better stretch of up days on US markets is rare, having occurred only 12 times since 2000. When they have appeared during that period, they have come in multiples. In 2000, the streak happened three times; in 2005, twice; in 2007, twice. In the recovery year of 2003, there were five such strings.
What does this mean? It may be simple coincidence.
The timing is intriguing, however. In 2003, three of the streaks occurred within two months of each other. In 2007, an eight-day streak was broken by a single down day in April and then immediately followed by a seven-day string.
With one exception, the streaks have occurred when the market was in a long-term upswing – sometimes during an early-stage rally, such as 2003, or a late-stage run, as in 2007. The exception was 2000, where the market peaked in January but its three multiday streaks didn't occur until July and August.
The next few weeks may tell us whether 2009 is the year that reaffirms this "streaks come in bunches" precedent. Or breaks it, as it has broken so many other ones.