The Dow Jones has fallen 8 days in a row. But as always, market stage matters (the same kind of price action means different things in different market stages). The Dow has fallen 8 days in a row while it’s still in an uptrend (i.e. is above its 200 daily moving average). This is uncommon – most 8 days in a row streaks occur when the Dow is in a downtrend (i.e. is below its 200 daily moving average).

Here’s what happens next to the Dow when it falls 8 days in a row while being above its 200 daily moving average.

Here’s what happens next to the S&P when the Dow falls 8 days in a row while being above its 200 daily moving average.

Click here to download the data in Excel.

As you can see, the stock market tends to go up in the next 3-12 months when the Dow falls 8 days in a row while still in an uptrend.

Here are the historical cases in detail.

March 27, 2017

The S&P 500 rallied over the next 10 months before beginning a “small correction”.

May 9, 1989

The stock market rallied 5 months before starting a “small correction”.

January 18, 1968

The stock market was in the middle of a “small correction”. It rallied another 7 months.

July 19, 1963

The stock market rallied another 1.5 years before starting a “small correction”.

May 16, 1956

The S&P 500 was in the middle of a “significant correction” in this case. The Medium-Long Term Model doesn’t predict a “significant correction” right now.

Conclusion

The sample size of this study is small: only 5 cases. But this does support our other recent market studies, which suggest that the stock market will trend higher in the next few months.