Levitation: Market tied longest streak of all time

By Lawrence G. McMillan

In our daily letters and in last week’s hotline, we have written extensively about the “levitating act” that the stock market was performing.  Essentially, it had gone from late December through this past Tuesday, while hovering above a number of standard indicators. 

The one that we have been mentioning most often is the 20-day moving average of $SPX. $SPX went 51 straight trading days (from December 20, 2011, through March 5, 2012) without even touching its 20-day moving average, and it went 52 consecutive trading days without closing below its moving average.  There are similar statistics for the Dow-Jones Industrials ($DJX) [it touched a couple of times, but never closed below], the Russell 2000 ($RUT) [its “streak” was shorter in length], and the NASDAQ 100 ($NDX), among many others, I’m sure.

We first wrote about this sort of thing in Volume 19, No. 7 and then again in Volume 20, No. 2.  Since we have data on the Dow back to 1928, we use that for long-term statistical calculations.  In the case of the Dow, the recent streak of 51 days without touching the 20-day tied for the longest streak of all time (tied with a streak that ended on July 14, 1944).  

The conclusions of the original study are still apropos...

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