One way to tell if a market trend will continue, either up or down, is to see how the current streak compares with the past. So I took a look at the daily closing price of the Dow over the last 10 years, or 2514 sessions, to see just how many winning and losing streaks there were, and how long they were. The results are interesting:
(Up streaks are in green, down in red. Click graph to view larger.)
The data is pretty similar for both winning and losing streaks. The longest streak was 10 sessions; three of those were up, two were down. We also see that by the time a streak has gone on for four days, it's starting to get pretty long in the tooth. For example, there were only 36 times over ten years that a winning streak went on more than four days. You can use this data to guide your confidence that a streak may or may not continue.
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