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

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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,
Steve
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!


Source: http://www.stansberryresearch.com/dailywealth/3394/eight-straight-down-days-here-s-what-happens-next



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