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Eight Straight Down Days... Here's What Happens Next

By Dr. Steve Sjuggerud
Monday, November 7, 2016

U.S. stocks have fallen for eight straight days in a row...
This is an incredibly rare occurrence. It has only happened five times in the last 35 years.
So... what happens next? What should we expect?
Is eight straight down days an ominous sign? Is it just the beginning of a major downtrend in stocks?
Or is eight straight down days the complete exhaustion of a downtrend? Is it the bottom? Should stocks go up from here?
The reality is interesting...
Going back to 1982, we have had eight down days in a row just five other times. In every single one of those instances, the stock market was higher a year later.
The gains one year later were incredible...
The average one-year gain after eight down days was 29.9%. And again, the stock market was up – every single time!
These results are too good, actually. I've tested lots of investment systems over the years, and these results are off-the-charts good... But because this has only happened five times, we don't have a big sample size.
So let's widen our scope to see if these gains are for real...
What happens to the stock market one year later after SEVEN down days in a row?
Our sample size nearly doubles – from five unique occurrences to nine. And the results are still astounding!
The stock market was up 26.6%, on average, in the nine times that stocks fell for seven straight days, going back 35 years.
These results are still fantastic. But again, we're still only looking at nine unique instances. No statistician would call those results "significant."
So let's widen our scope one more time...
What happens after six straight down days?
More incredible results.
A streak of six straight down days has happened 32 unique times going back to 1982.
After six down days, stocks delivered a 21.7% return, on average, one year later.
The winning percentage was still extremely high: Stocks were higher one year later 94% of the time.
So the takeaway today is clear: Don't be scared. Be bold.
Based on history going back to 1982, after a long stretch of losing days, stocks perform incredibly well over the next 12 months.
Invest accordingly,
P.S. Saving My Life update, at the end of Week 2 of 8: I'm pushing to give myself a great Christmas present – being in the best shape in years. I'm 227.8 pounds today – that's down 4.2 pounds in two weeks. How are you doing? It's just six weeks. You can do anything for six weeks, right? Let's do it!

Further Reading:

In September, with the S&P 500 nearing all-time highs, Steve explained why the market had more upside ahead. "History is clear," he writes. "New all-time highs are a good thing for stock prices." Read more here: Stocks Are Near All-Time Highs... And You Have Nothing to Fear.
"That's all it took?" Steve writes. "A couple of bad days in the market – after a long stretch of calm – and you think it's all over?" Get the rest of the story here: Stop Your Worrying, This Isn't What a Top Feels Like.

Market Notes

Booz Allen Hamilton (BAH)... "offense" contractor
Northrop Grumman (NOC)... "offense" contractor
Loews (L)... holding company
AXIS Capital (AXS)... insurance
Everest Re (RE)... insurance
JPMorgan Chase (JPM)... banking
Provident Financial Services (PFS)... banking
MasterCard (MA)... credit cards
F5 Networks (FFIV)... data networking
Ubiquiti Networks (UBNT)... wireless networks
VMware (VMW)... cloud software
Take-Two Interactive (TTWO)... video games
Archer Daniels Midland (ADM)... agriculture
Scotts Miracle-Gro (SMG)... fertilizer
Rollins (ROL)... pest control
Swift Transportation (SWFT)... trucking
Harley-Davidson (HOG)... motorcycles
Domino's Pizza (DPZ)... pizza
Fresh Del Monte Produce (FDP)... produce
Crane (CR)... vending machines
Teck Resources (TCK)... precious metals
Baker Hughes (BHI)... oil services

Cardinal Health (CAH)... prescription drugs
McKesson (MCK)... prescription drugs
Anthem (ANTM)... health insurance
Cigna (CI)... health insurance
Amgen (AMGN)... biotech
CVS Health (CVS)... drugstores
Rite Aid (RAD)... drugstores
Fitbit (FIT)... fitness trackers
Under Armour (UA)... athletic apparel
Bed Bath & Beyond (BBBY)... home goods
Fossil (FOSL)... watches
Estee Lauder (EL)... cosmetics
Starbucks (SBUX)... coffee
Cal-Maine Foods (CALM)... eggs
Cameco (CCJ)... uranium
Gannett (GCI)... newspapers
Nokia (NOK)... telecom

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