It has been an unlucky seven straight days of declines for the Dow Jones Industrial Average since the close on July 22nd.  Seven-day losing streaks for the DJIA aren’t that rare by any stretch of the imagination, though.  Since 1900, there have been 85 prior losing streaks of seven or more trading days, so it works out to about once every 16 months.  What is unique about the DJIA’s current losing streak, though, is that the declines have been contained.  While most investors would not want to see seven straight days of declines, if there was ever a seven-day losing streak one had to endure, it has been the current one.  Through Tuesday, the DJIA’s total decline during the current seven-day decline was just 1.38%.  Of all the 85 prior seven-day losing streaks, there has never been a smaller decline.  Interestingly, the next closest streak in terms of smallest declines also spanned the period from late July to early August of 1941 (-1.5%).

Not only has the Dow seen muted declines, but the S&P 500 and Nasdaq are even down less.  In fact, during the seven days that the DJIA has been down, the S&P 500 has been up on four out of seven days, while the Nasdaq has only had two down days.  The table below lists each of the prior 23 seven-day losing streaks for the DJIA since 1971 (the year the Nasdaq began).  For each streak, we show the returns of all three indices over that seven-day span as well as the DJIA’s change over the following week and month.  As shown in the table, the current streak is only the second one where the Nasdaq traded higher during the course of the DJIA’s losing streak.  Meanwhile, during the prior streaks for the DJIA, the S&P 500’s decline was never as small as the 0.83% decline over the last seven trading days.  The one period where the performance figures over the seven-day losing streak were similar to the declines in the current period was in May 1989.

Finally, looking at the returns of the DJIA following prior streaks, the forward one-week and one-month returns have not been particularly strong.  One week later, the DJIA averaged a decline of 0.36% (median: -0.05%) with positive returns just 43% of the time.  A month later, the average return improved to +0.43%, but the median got even worse (-0.51%).  Looking on the bright side, though, the one period where the major averages saw similar returns to the ones seen in the current streak was in May 1989.  Following that streak, the DJIA traded 3.7% higher over the next week and 5.8% over the following month.

table of seven day losing streaks

 

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