Before the open this morning when we saw the above headline, our natural inclination was to think that equity futures were showing a rather sizable decline. So we were surprised when we looked at the market and S&P futures were down just one point, even as fair value was down three points. In other words, despite the negative headline, futures were indicating a flat to positive open! This morning’s episode is just one more in the long list of examples where investors, pundits, and headline writers have been chomping at the bit to put the nail in this rally. It seems like every day, there’s a negative headline saying what’s wrong with the market, but by the time the closing bell rings, stocks finish in the green.
Today’s rally has made it six straight days of gains for the S&P 500. Since the bull market began in March 2009, this is the 18th streak of at least six straight daily gains for the S&P 500. In the table below, we highlight each of these streaks. In each row, the date represents day six of the winning streak, and with each streak, we also show how long the streak lasted, how much the S&P 500 gained in the first six trading days, as well as how it traded the following day. As shown in the list, in the early years of this bull market, the S&P 500 had a hard time making it to lucky number seven as the first ten streaks ended at six trading days. Since then, though, the S&P 500’s record on day seven has been more evenly split with four gains and three losses. Overall, just four of the streaks during this bull market have lasted more than six days, and the longest streak was eight days. Finally, while the current rally has been fun for the bulls, the 1.8% gain is on the weak side. Overall, the average six trading day gain during prior streaks has been over 3%. Let’s not get greedy, though!