With a little more than 1 week left in August, it looks like the S&P 500, NASDAQ, and Russell 2000 will all close higher this month vs. the previous month. In other words, unless the stock market makes a downwards reversal next week, the S&P and NASDAQ will be up 5 months in a row while the Russell will be up 6 months in a row.

Here’s what happens next (historically) when the S&P goes up 5 consecutive months.

Here’s what happens next (historically) when the NASDAQ goes up 5 consecutive months.

Here’s what happens next (historically) when the Russell 2000 goes up 6 consecutive months.

Click here to download the data in Excel.

Conclusion

As you can see, the S&P 500 going up 5 months in a row is a sign of extreme strength in the U.S. stock market. Even though the stock market might make a short term pullback and break the winning streak, strength usually begets more strength in the medium-long term.

Another interesting point is that while the Russell and NASDAQ have been leading the S&P 500 year-to-date, that might start to change over the next 12 months. The Russell and NASDAQ might start to lag, which means that Dow will start to lead. This is called sector/index rotation.

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By Troy Bombardia

BullMarkets.co

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.

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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