Don't Let the Losing Streak Fool You
The market has now been red for five days in a row. This isn't highly unusual, of course, but consider that this is only the fourth time in the last year we've seen five or more down days in a row. For two of those instances, the streak lasted five days, while the other two saw the market sink as long as seven days in a row. So, to all the bulls who tell me, "Five down days means the market should be oversold and rally," I would ask, "Where is the proof?"
What I do find fascinating is that it happened once in April, for which the subsequent rally led to the market peak. After another occurrence in May, the ensuing rally simply constituted relief before the market came down again. Heading into early August of 2011, the seven-day decline led in to a mere relief rebound before the indices headed lower. Finally, in November of last year a very sharp rally followed that led to a peak, then another slide....362 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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