Hey, Ross here:
And here’s a chart from Carson Investment Research showing the probabilities of a bull market in view of the Dow’s current 9-day win streak.
Chart of the Day
Yesterday’s market close marked a 9-day win streak for the Dow – a first since August 2017.
That’s quite a feat – which is why if you scan the financial news headlines, you’ll see this factoid all over the place.
But it goes deeper than that.
As the chart above shows, dating back to 1945, there have been 28 instances of the Dow going on a 9-day win streak.
24 of those times (aka 86% of the time), the Dow was higher a year later – often by more than double digits.
Oh, and during the 9 most recent occurrences of the Dow going on a 9-day win streak, it was higher a year later each and every time.
This is why yesterday’s 2% concurrent drop in the Nasdaq doesn’t bother me at all.
In fact, as I explain in the Insight of the Day, it’s perfectly natural.
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Insight of the Day
The Dow rising while the Nasdaq is falling is a sign of regular – and healthy – rotation.
I said earlier that the market – particularly the Nasdaq – had gotten overextended, so any pullback would be normal.
That’s exactly what we’re seeing now.
And remember, earlier this year while the Nasdaq was rising, the Dow was lagging behind.
So if the Dow “overtakes” the Nasdaq for a bit, this is also normal.
In fact, it’s a sign of rotation, where the market’s gains rotate to a different sector.
And not only is this kind of rotation healthy, it’s necessary to keep the bull market going.
That’s why I’m not worried in the least – and why you shouldn’t worry either.
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Embrace the surge,
Ross Givens
Editor, Stock Surge Daily
