The American market was once again up. Nothing powerful, but nothing wimpish. Dow Industrials up +0.59%. The Russell 2000 outperformed the S&P 500 - that's a positive. Eight out of 10 S&P Sectors were up - the only downers were Energy (falling oil price) and Utilities.All I can say is this - we're now looking at an accident waiting to happen. Up seven days in a row. RSI at 77.6 (above 70 is overbought) and decreasing volume. The question now is - will it break a leg or merely bark a shin and then continue the upward climb?
Bespoke Investment Group had some interesting stats on the longevity of stock market runs. Is seven in a row unusual? Nope. They showed the followed stats since 1986:
- seven in a row has occurred 167 times
- eight in a row has occurred 87 times
- nine in a row has occurred 40 times
- ten in a row has occurred twenty times
- eleven in a row has occurred eight times
- twelve in a row has occurred three times
- thirteen in a row has occurred two times
- fourteen in a row has occurred one time.
Those of a statistical bent can see that the frequency drops by approximately half with each increase; e.g., 167/2 = 83. The actual number was 87.
So - each day - the chances of an up or down day the next day is a coin toss. 50:50. Anyone for A Random Walk Down Wall Street (Burton Malkiel).
Gold in Ozzie Dollars was up overnight. At the time of writing, it's up about 0.8% in the past 24 hours - having come off a little in the past couple of hours. Given that Gold in Ozzie Dollars tends to trade inversely to the general Australian market, that's just another little sign that the bears have some hope. Don't expect a one-to-one relationship - that's just a tendency.
Good luck
Red
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