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Monday, March 27, 2017
Stocks just fell for six days in a row...
That does not happen often.
It wasn't a big six-day loss – just 1.4%. But you don't expect the market to go down for six straight days when it is in an overall uptrend, as it is right now.
So what typically happens to stock prices after a signal like this?
The answer might surprise you...
My friend Jason Goepfert (of SentimenTrader.com) wanted to find out what typically happens after six down days in the market...
He looked back at every time this happened over history. And he uncovered a truly astounding fact. Here's what he told me...
Granted, this didn't happen often over the last 60 years. It only happened a total of 15 times – a couple of times each decade.
But the results were amazing. Again, stocks were up one month later, every single time.
The gains don't appear to be a fluke...
Stocks were also up six months later in all but two instances. And the story is the same looking one year out.
It's not often you come across a signal that was right – every time – going back 60 years.
So... should you trade it?
"We're not reading too much into this," Jason said.
Well... why not?
It's because 15 instances – a couple every decade – is not enough evidence to go on. And Jason dropped another important caveat:
"Prior to 1960, [this signal] had the exact opposite connotation," he said. Prior to 1960, six consecutive down days delivered losses down the road – most of the time.
It is a truly astounding fact – a setup that has been infallible for the last 60 years. However, we aren't planning on placing any one-month bets because of it...
You are welcome to trade it if you'd like. But to us, it's more of a "fun fact" than a trading system...
Regardless, we're in the late stages of a great bull market... And the biggest gains tend to happen at this point. The pattern after six straight down days may just be a fun fact to us, but we already expect that stocks have more upside ahead.
If you're not invested yet, you should be!
Editor's note: Steve believes we're at the start of a dramatic shift in the markets that could push the Dow all the way up to 50,000... And that we may never see an opportunity like this again. If you make the right choices over the coming months, you could turn every $100 invested into $1,000 or more. Learn how to capture the biggest gains (without sitting through a long promotional video) by clicking here.
"U.S. stocks ended February with one of the rarest streaks we've ever seen," Steve writes. Stocks moved higher for 12 trading days in a row. But the interesting thing is what happens after these kinds of streaks... Learn what to expect from "The Melt Up" here: What's Next for Stocks After 12 Straight Up Days.
"Stock valuations went to record highs. And I got scared... I missed the opportunity," Steve writes. In this essay, he recalls missing out on the late-1990s boom – and explains why we could have a similar setup today. Get the full story here: Dow 20,000 – Don't Chicken Out!
NEW HIGHS OF NOTE LAST WEEK
Philip Morris (PM)... tobacco
Reynolds American (RAI)... tobacco
Dow Chemical (DOW)... chemicals
Lockheed Martin (LMT)... "offense" contractor
Raytheon (RTN)... "offense" contractor
3M (MMM)... manufacturing
Ferrari (RACE)... luxury cars
TrueCar (TRUE)... automotive pricing
Visa (V)... credit cards
Equifax (EFX)... credit reports
Accenture (ACN)... IT consulting
Check Point Software (CHKP)... security software
Apple (AAPL)... consumer electronics
Facebook (FB)... social media
Yahoo (YHOO)... search engine
Shopify (SHOP)... e-commerce
Amazon (AMZN)... online retail
Priceline (PCLN)... online travel
Carnival (CCL)... cruises
Royal Caribbean Cruises (RCL)... cruises
Marriott (MAR)... hotels
Wynn Resorts (WYNN)... casinos and resorts
Panera Bread (PNRA)... restaurants
Ruth's Hospitality (RUTH)... restaurants
Dunkin' Brands (DNKN)... coffee and donuts
Snyder's-Lance (LNCE)... snacks
National Beverage (FIZZ)... soft drinks
PepsiCo (PEP)... soft drinks
NEW LOWS OF NOTE LAST WEEK
Valeant Pharmaceuticals (VRX)... Bill Ackman's disaster
Rite Aid (RAD)... drugstores
GGP (GGP)... dying malls
Macy's (M)... department store
Target (TGT)... discount retailer
Abercrombie & Fitch (ANF)... clothing retailer
L Brands (LB)... clothing retailer
Urban Outfitters (URBN)... clothing retailer
Bed Bath & Beyond (BBBY)... home-goods retailer
Fossil (FOSL)... watch retailer
Fitbit (FIT)... "cocktail party" stock