A rare run, right in your face
The S&P 500 — tracked here via SPY — is closing in on a ninth straight winning week, which is the kind of stat that makes quant folks sit up and everyone else Google, “is this good or bad?” Since 1945, this has only happened 10 other times. So yeah, we’re officially in rare bird territory.
The market has ripped 18.76% off its late-March lows, basically undoing the selloff that followed the Strait of Hormuz closure in late February. In other words: the tape went from “uh oh” to “never mind” in a hurry.
History says: usually bullish, sometimes a trap
If you look at the prior 10 episodes, the pattern is pretty friendly to bulls:
- one month later, the index was higher 90% of the time
- three months later, the win rate dropped to 60%
- six months later, it was up 70% of the time
- a year later, it was higher in 8 out of 10 cases
The average 12-month gain in those cases? About 10.21%. That’s not exactly pocket change.
But there’s always a catch
The caution flag is that the streaks that ended badly did so when the macro backdrop was about to get messy — think recession, rate hikes, or geopolitical shocks. The ugly outlier in the sample was August 1989, when the rally ran into the Gulf War and oil prices went haywire. So the question isn’t really whether streaks can keep going. It’s whether the macro gods are feeling generous.
Big picture
For investors, the setup is basically: history says strength often begets more strength, but after nine green weeks, you’re no longer buying sleepy boredom — you’re buying momentum at near-record levels. That can work beautifully. It can also make you the person who bought the party right before the DJ vanished.