Losing Streak for S&P Usually Ends in Six Days

Thursday was the sixth consecutive day that the S&P 500(NYSEARCA:SY) has declined.



By Jeffrey Hirsch


Over this six-trading-day span S&P 500 has declined 6.7%. Russell 2000 has also declined for six straight days. DJIA (NYSEARCA:DIA) and NASDAQ(NYSEARCA:QQQ) logged modest gains on Monday to avoid the losing streak. The last time S&P 500 declined six or more days was in late October/early-November of 2016.  Since 1950, S&P 500 has suffered 118 daily losing streaks of six or more days. Sixty-seven of those streaks ended at six days. The average loss during those past streaks was 3.8%. The average gain the day that the losing streak ended was 0.83%. The smallest, streak-ending single day gain was 0.02% in February 1958 and the best was 4.01 in February 2009.

In the above chart the average performance 30 trading days before and the 30 trading days after the last 67 S&P 500 losing streaks lasting exactly six days has been plotted. The losing streak is easily identified. Historically, losses incurred during the decline took longer than 30 trading days to recoup. There is also a 56.8% chance, based upon history that S&P 500’s daily losing streak ends at six as 67 of the last 118 did.