SPX 'Refreshing' Pause in Weekly Streak?

9-consecutive Advancing Weeks Comes to an End

Last week’s -1.52% decline ended a streak of 9 consecutive higher weekly closes for the S&P 500. Equity market advances experience, or actually require, 'refreshing pauses,' which can often denote short consolidation or correction phases within an uptrend. These pauses can serve as necessary cooling-off periods for overextended markets, and create openings for new buyers to participate. In doing so, they revitalize the upward trajectory by mitigating excessive shorter-term enthusiasm and reinforcing the sustainability of the trend.

An examination of the S&P 500's historical weekly streaks ending at 9 reinforces the idea of markets following impulsive and corrective waves. Going back to 1900 (utilizing data before the Dow's inclusion in 1927), the data and table below illustrate that following a pause in streaks of 9, the SPX tends to be higher one month later in 9 out of 11 instances, with an average gain of 1.75%. The statistically significant return pattern extends up to the 6-month interval, but becomes less informative past 9-months.