Is seven straight up weeks a good thing or a bad thing?
Key points:
- The S&P 500 registered its seventh consecutive up week on May 15th
- This has happened only 37 times since the 1920s
- The common perception/concern is that a run of this magnitude (almost two straight months of higher weekly closes) may constitute action resembling a blow-off top
- History appears to say something different
The S&P 500 has been on a heater
From January 30th through March 27th, the S&P 500 declined 7 out of 8 weeks, losing -8.2% in the process. With fears of war, higher energy costs, and inflation swirling, things looked fairly dire. However, since then, the S&P 500 has registered 7 consecutive higher weekly closes, soaring 16.3% in the process, to a new all-time high.
Interestingly, the overall response has been something less than enthusiastic. The rally has completely confounded existing market bears, and now there is chatter of a "blow-off" top. But what does history say about a 7-week rally? Let's take a closer look.
Seven straight weekly advances tend to beget more strength
Our test period runs from January 2nd, 1928, through May 15th, 2026, or almost 98.5 y