Unexpectedly Intriguing!
August 10, 2015

We don't normally follow the Dow Industrials index (NYSE: DJI), since it really doesn't capture enough of the breadth of the U.S. stock market, but last Friday, 7 August 2015 saw a pretty rare occurrence, with the Dow having closed lower than the previous day for the seventh consecutive trading day in a row.

While the S&P 500 fared slightly better by that measure over that same period of time, declining in only six of the same seven days, we wondered what its worst streaks were over its entire history.

To find out, we tapped Yahoo! Finance's S&P 500 historical price database and ran the numbers. The chart below reveals the number and duration of two or more consecutively down days that the index has recorded over the 16,506 trading days from 4 January 1950 through 7 August 2015.

Number of Two or More Consecutively Down Days for the S&P 500, 4 January 1950 through 7 August 2015

Since 4 January 1950, we see that the S&P 500 has had losing streaks run seven tradings days or longer some 44 times, with 23 of those streaks lasting exactly seven days before the index recorded an up day to break its losing streak.

The longest losing streak recorded over this period of time lasted twelve consecutive trading days, which began after it peaked on 21 April 1966 and lasted through 9 May 1966.

The timing of that longest losing streak roughly corresponds to the fallout from the Fed's decision on 12 April 1966 to begin "'restricting' rather than 'moderating' the growth in the reserve base, bank credit, and the money supply" available to the U.S. financial system, inaugurating a prolonged period of increased distress for the U.S. economy. That distress was indicated by the reversing momentum of the S&P 500 index, where it coasted on its previous upward inertia to top at 92.42 on 21 April 1966, after which it entered into a general period of decline until it finally bottomed at 73.20 on 7 October 1966, some 20.7% below its previous peak level. It would not recover to that former peak until 27 April 1967.

Unless there is significant erosion in the expectations for future dividends or a significant negative noise event, that kind of decline is unlikely to occur in today's market, but the general trend our rebaselined model of how stock prices work currently forecasts is such that the remainder of August 2015 would appear to be set to follow a downward trajectory.

Alternative Futures - S&P 500 - Rebaselined Model - Snapshot on 7 August 2015

Things would appear set to improve in September 2015, with the biggest boost coinciding with the timing of the Federal Reserve's Open Market Committee meeting in the middle of that month, but our limited ability to peer into the farther future suggests that would provide only a short term boost, as 2015 on the whole would appear to be set to be best described as a year of relative stagnation for U.S. stock prices.

Labels: ,

About Political Calculations

blog advertising
is good for you

Welcome to the blogosphere's toolchest! Here, unlike other blogs dedicated to analyzing current events, we create easy-to-use, simple tools to do the math related to them so you can get in on the action too! If you would like to learn more about these tools, or if you would like to contribute ideas to develop for this blog, please e-mail us at:

ironman at politicalcalculations.com

Thanks in advance!

Recent Posts


This year, we'll be experimenting with a number of apps to bring more of a current events focus to Political Calculations - we're test driving the app(s) below!

Most Popular Posts
Quick Index

Site Data

This site is primarily powered by:

This page is powered by Blogger. Isn't yours?

Visitors since December 6, 2004:

CSS Validation

Valid CSS!

RSS Site Feed

AddThis Feed Button


The tools on this site are built using JavaScript. If you would like to learn more, one of the best free resources on the web is available at W3Schools.com.

Other Cool Resources

Blog Roll

Market Links
Charities We Support
Recommended Reading
Recommended Viewing
Recently Shopped

Seeking Alpha Certified

Legal Disclaimer

Materials on this website are published by Political Calculations to provide visitors with free information and insights regarding the incentives created by the laws and policies described. However, this website is not designed for the purpose of providing legal, medical or financial advice to individuals. Visitors should not rely upon information on this website as a substitute for personal legal, medical or financial advice. While we make every effort to provide accurate website information, laws can change and inaccuracies happen despite our best efforts. If you have an individual problem, you should seek advice from a licensed professional in your state, i.e., by a competent authority with specialized knowledge who can apply it to the particular circumstances of your case.