How Many Days in a Row Can the Stock Market Go Up or Down?

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A separate study was down to see how many back-to-back days the market fell.

Looking for a Stock Market Top?

How many days in a row of gains are too many? Investors expecting that the market would invariably turn down a run up of three or four consecutive days will be surprised to find that over that time period it is reasonably common for the market to exceed that number of up days. The longest consecutive positive streak was 15 days during the stock market recovery in 2010.

Waiting for the Market to Hit Bottom

Alternatively, investors may find themselves too quick to leap back in the market after a few down days. The study also showed that extended periods of decline were also common. Waiting for a down day to come could leave an investor on the sideline. Many investors try to time the market, that is, betting that if prices go up a number of days in a row, it is time for a correction, or if the market goes down several consecutive days, its time to buy.

This is not necessarily true. The ETF for the Standard and Poors 500 Index, under the symbol SPY, was used as a proxy for the market.

The data for the study were obtained from Yahoo! Finance, which has a useful tool to download historical price information into Microsoft Excel. There were two separate instances where the SPY lost ground for seven days in a row, and once during January 2008 the market lost value on eight consecutive days.

Trying to Time the Stock Market

Traders are always looking to find an advantage, looking for trends that will enable them to make money each time they make a trade. Under extreme circumstances the stock market can continue to rise for many days, or fall day after day. The data were then analyzed to determine the highest number of consecutive days that the market rose. What seems like a bargain hunting opportunity can be the starting point for losses.

Analysis of Stock Market Daily Prices

The author performed an analysis of stock market prices over the last 18 years to determine how many consecutive days in that period the market went up or down. But, since the market is a competition, with each person trying to win, trends are difficult to spot and do not continue to work perpetually.

Thinking that the market must be ready to go up after a prolonged downturn, or must inevitably fall after a few days of gains is a recipe for losses or missed opportunities.

Source. Working on Market TimingThe US stock market is very volatile, and an investor may try to take advantage of that volatility to make money. There were 21 instances of streaks of more than seven days of increasing prices.

An investor who sold or shorted the market after a few days could miss out on these extended runs