Russell Has Gone Up 7 Weeks in a Row. EXTREMELY Bullish for Stocks
Stock-Markets / Stock Markets 2018 Jun 18, 2018 - 05:41 PM GMTBy: Troy_Bombardia
Last week I published a study demonstrating what happens to the stock market when the Russell 2000 (small caps) index goes up 6 weeks in a row. The Russell has extended that streak to 7 weeks in a row.
Here’s what happens next to the S&P 500 when the Russell 2000 goes up 7 weeks in a row (for the first time in half a year).
Click here to download the data in Excel.
Notice how the U.S. stock market’s medium-long term returns are EXTREMELY BULLISH. The S&P goes every single time on a 6 month and 1 year forward basis. The median return in 1 year is 15.5%!
Here are the historical cases in detail.
October 14, 2013 and February 11, 2013
The stock market surged after the Russell 2000 went up 7 weeks in a row.
May 26, 2003
The stock market surged after the Russell 2000 went up 7 weeks in a row.
May 10, 1999
The stock market (S&P 500) rallied another 9 months after the Russell went up 7 weeks in a row.
September 9, 1996 and June 19, 1995 and September 5, 1994
The stock market soared after each time the Russell went up 7 weeks in a row.
November 23, 1992 and February 25, 1991
The stock market soared after each time the Russell went up 7 weeks in a row.
January 9, 1989
The S&P 500 rallied another 1.5 years before starting a “significant correction” (which the Medium-Long Term Model predicted).
Conclusion
This study suggests that the stock market has a very high probability of going higher over the next 6 months and 1 year.
The Russell going up 7 weeks in a row is a sign of extreme strength. Extreme strength only happens during bull markets – it doesn’t happen during bear markets (i.e. this isn’t a bear market rally).
Click here for more market studies.
By Troy Bombardia
I’m Troy Bombardia, the author behind BullMarkets.co. I used to run a hedge fund, but closed it due to a major health scare. I am now enjoying life and simply investing/trading my own account. I focus on long term performance and ignore short term performance.
Copyright 2018 © Troy Bombardia - All Rights Reserved
Disclaimer: The above is a matter of opinion provided for general information purposes only and is not intended as investment advice. Information and analysis above are derived from sources and utilising methods believed to be reliable, but we cannot accept responsibility for any losses you may incur as a result of this analysis. Individuals should consult with their personal financial advisors.
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