The last time the Dow notched a four-week winning streak at the same time the Nasdaq suffered a two-week losing streak was November 2013, according to data from Schaeffer's Senior Quantitative Analyst Rocky White. Prior to that, you'd have to go back to the pre-financial crisis heights of mid-2007, which was the first signal since the dot-com boom of 1999. What's more, the COMP's two-week loss of 2.44% is the steepest of these signals since May 1999, when the tech-rich index suffered a 3.36% drop.
Blue Chips Quietly Outperform After Signals
Following these signals, the Dow has outperformed, especially in the next month. One week after a signal, the blue-chip barometer averaged a gain of 0.4% -- more than double its anytime one-week return since 1972. At the two-week and one-month markers, the DJIA was up an average of 1.20% and 1.58%, respectively, with a stellar positive rate of 85.7%. That's compared to an average two-week and one-month return of 0.31% and 0.63%, respectively, with win rates below 60%.
Three months after a signal, the Dow was up 2.19%, on average -- still better than its anytime three-month return of 2.03%. However, the percent positive is slightly lower after a signal, at 57.1%, compared to 64.2% anytime. Another notable data point is the lower-than-usual standard deviation after a signal, which indicates lower-than-usual volatility in the near term.
