QQQE - Lucky 7 For The Nasdaq
2023-06-12 14:45:00 ET
Summary
- Nasdaq extended its streak of weekly gains to seven, the longest since November 2019.
- There have been seven periods of at least seven-week rallies since the Financial Crisis lows in May 2019.
- The average ‘max drawdown’ over any three-month period for the Nasdaq since the start of 2009 has been 5.33%.
It wasn't by much, but the Nasdaq rallied 0.14% last week and extended its streak of weekly gains to seven. That's the longest streak of weekly gains for the index since November 2019. To find a longer streak, you have to go back to February 2018 when the Nasdaq had ten straight weeks of gains. As shown in the chart below, since the Financial Crisis lows in May 2019, there have now been seven different periods where the Nasdaq rallied for at least seven weeks in a row.
The chart below shows the performance of the Nasdaq since the start of 2009, and we have included red dots to show each time the Nasdaq was up for seven straight weeks (for each period, the dot represents the Friday of the seventh positive week). While there were two periods (2010 and 2012) where the Nasdaq clearly experienced a moderate pullback fairly quickly after its seventh positive week, following the others, it doesn't appear as though the rally was tripped up at all.
Looking at forward performance after a seven-week winning streak in more detail, the chart below shows the maximum drawdown for the S&P 500 in the three months after seven straight weeks of gains in the Nasdaq. Here again, it's easy to see the large declines that followed the 2010 and 2012 streaks, but in the four other streaks, the S&P 500 never even pulled back 4%. In two of those periods, the maximum decline never exceeded 0.41%. For reference, the average 'max drawdown' over any three-month period for the Nasdaq since the start of 2009 has been 5.33%.
Editor's Note: The summary bullets for this article were chosen by Seeking Alpha editors.
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Lucky 7 For The Nasdaq