Today the S&P 500 ended its daily streak of trading days without a 1% or greater decline at 109. Since 1950, there are only 9 other S&P 500 streaks of this duration or longer. The longest streak was 184 trading days in 1963. The average gain during the past 9 streaks was 15.16%. S&P 500 fell short of this mark this time at 11.30%. Compared to S&P 500 streaks lasting 89 trading days or longer this list has six fewer and shows additional weakness 3-Months after the streak ended.

 

 

The chart above is the average performance of these past 9 streaks 30 trading days before the streak ended and 60 trading days after comparing 79 trading day and longer streaks to 89 day and longer streaks to 109 trading days and longer. Weakness near the end of the chart, 60 trading days is approximately 3 calendar months later.

 

 

Arguable today’s retreat was overdue. Perhaps it was due to some early end-of-quarter profit taking and portfolio restructuring triggered by President Trump’s slipping approval rating and the possibility that health care reform may not happen as quickly as promised. This potential failure has led to speculation that other Administration major policy changes such as tax cuts and infrastructure spending roll out will be delayed or worse yet, not happen at all. It seems like a stretch at this point to jump to the conclusion that the Trump Administration is not going to have any success. We believe the market is still on track for double-digit full year gains and DJIA could still easily reach 23,000 to 24,000 by yearend.