Winning Streaks Are Made To Be Broken
Rally Streak continues for SPX, NDX
Danny Riley
November 09, 2023
Follow @MrTopStep on Twitter and please share if you find our work valuable!
Our View
I always think that winning streaks are made to be broken.
My friend Jeff Hirsch from the Stock Trader’s Almanac did a guest post in April 2014 about winning streaks, titled History Of SPY Daily Winning Streaks.
Here’s an updated look at Jeff’s thoughts: Still Bullish – Even After S&P 500 Daily Winning Streak Ends.
He wrote:
Including the current S&P 500 daily winning streak there have been 233 six-day (or longer) Winning streaks by S&P 500 since 1950. The current 8-day streak has added 6.4% to the S&P 500 since it began on October 30. This is better than the average performance of the past 34 times that S&P 500 has been up eight days in-a-row, but well below the 11.9% S&P climbed in an eight-trading-day streak from March 12 to March 21, 2003.
History cannot tell us when this current streak will end. However, it does indicate increasingly longer streaks are infrequent. Although S&P 500 has gone as long as 14 days without a decline (March 26 to April 15, 1971), it has done so just once in nearly 74 years. When the streak does end, all is not lost. As you can see in the following chart of the 30 trading days before and 60 trading days after the past 7-, 8-, and 9-day daily winning streaks ended, S&P 500 continued to move higher on average over the next 60 trading days.
Our Lean — Danny’s Trade
This is Danny Riley’s personal trading plan for the day.
To get this delivered daily, please consider upgrading to a paid membership.
MiM and Daily Recap
ES recap 15-min
The ES traded up to 4404.00 on Globex and traded 4402.25 on Wednesday's regular session open. After the open, the ES rallied up 4407.75 at 9:57, slowly dripped down to the 4388.00 level at 11:25, back-and-filled for the next 20 minutes, traded up to 4395.50 at 11:48 and then sold off down to new lows at 4375.00 at 12:09.
After the low, the ES rallied up to 4398.25 at 2:33 and chopped in a 4 to 6 point range until the ES popped up to 4404.75 as the early imbalance showed $545 million to buy. The ES traded 4401.50 as the 3:50 cash imbalance showed $1.635 billion to buy and traded 4398.50 on the 4:00 cash close. After 4:00, the ES pulled back to the 4394.25 level and settled at 4393.50 on the 5:00 futures close, down 4 points or 0.09% on the day.
In the end, it was a very choppy, low-volume day. In terms of the ES's overall tone, it was firm. In terms of the ES's overall trade, volume was low: only 181k traded on Globex and 1.137 million on the day session for a total of 1.318 million contracts traded.
Technical Edge
NYSE Breadth: 33% Upside Volume
Nasdaq Breadth: 37% Upside Volume
Advance/Decline: 42% Advance
Last week: Back-to-back 80/80 days for A/D and NYSE Breadth
VIX: ~14.50
S&P 500 — ES Futures
Economic Calendar
