The Dow Jones Industrial Average has declined for the fifth consecutive week, its longest such losing streak since 2011.
Specifically, the last time the Dow suffered a five-week losing streak was in June 2011, nearly eight years ago. After that, the index dropped another 7.5% in the subsequent three months, per data from Schaeffer’s Senior Quantitative Analyst Rocky White.
During the current losing streak, the Dow has surrendered less than 5%. Since 1900, there have been just eight similar streaks, after which the blue-chip barometer also experienced weaker-than-usual price action.
Almost any way you slice it, five-week losing streaks tend to precede weaker-than-usual near-term returns, and that’s especially true when the index surrenders less than 5% in those five weeks.
Statistics and historical data are great odds enhancers. Odds enchancers are a list of factors that increase the probability of your a trade going in your favor per your trading methodology. However, they don’t make the trade, so lets go to the chats to see where the DOW is heading next and if the charts support the above statistics.
Price formed a triple top. The triple top pattern is a type of chart pattern used in technical analysis to predict the reversal of an uptrend. In addition, price fell from daily supply at 26550 and the monthly supply at 26500.
The momentum to the upside had decreased, price action is range bound and the immediate levels in play are the daily supply at 26550 and the daily demand at 24900. Overall, price moving to the upside is limited at this time and if the daily demand at 24900 is breached, expect more downside risk.
This post is my personal opinion. I’m not a financial advisor, this isn’t financial advise. Do your own research before making investment decisions.