What can a long upward streak tell us?

Dow ended Thursday trading session with the 9th winning streak, the immediate comment from anybody is, "the market is overbought". But, when Dow has its 6th upward streak, the market was considered by some as overbought. The past market pattern has shown that an overbought market can continue to run until it has decided to stop. Last year when Dow was sliding downward, there were many seriously oversold situation and yet the market continued to plunge.

When will the current upward streak end? I have no idea but let's look at the cases of streak of 7 days or more as listed by Laurent Belsie and see what can follow a streak.









Except the 10-day winning streak on April 1971, which was followed by a 8% drop within 2 months, all the rest were followed by a few months of uptrend with gain averaging 15%.

a 15% up for the current 9-day upward streak will bring Dow to 10,350 level to complete wave (III) of major wave B of the 2007/2008 bear market unless the rebound since March 2009's low is not a wave B rebound.