LPL: About That Dow 9-Week Win Streak

The strong move in stocks continues. The S&P 500 Index has risen nearly 19% (as of February 22) from the December 24 lows, and the Dow Jones Industrial Average (Dow) has posted an incredible nine-week winning streak for the first time since a 10-week stretch back in 1995.

The Dow’s strength at this time of the year is especially impressive. To put it in perspective, the Dow closed up the first eight weeks of 2019—the second best win streak to start a year, eclipsed only by the 11 consecutive weekly wins that started 1964.

The Dow’s long weekly win streak could mean continued strength ahead. “Long weekly win streaks actually have led to stronger performance,” explained LPL Senior Market Strategist Ryan Detrick. “In fact, there have been 15 other nine-week win streaks since 1900, and a year later the Dow’s median return was nearly 18%. Not bad at all.”

As our LPL Chart of the Day shows, the returns after a nine-week win streak for the Dow are significantly better than its overall average return. A strong Dow has historically foreshadowed economic strength as well: Only twice out of the seven win streaks since 1950 has a recession taken place within two years of the streak. This, of course, is only one data point, but it continues to build on the other data points we’ve been sharing recently that support a continuation of this bull market in 2019 along with very little chance of a recession.