In the past twenty years, there have been 3 instances of five consecutive monthly gains. How many consecutive gains do we have this time?
A few days ago, someone mentioned that if the monthly line closes negative in September, it could be dangerous.
He said that historically, many times after four consecutive positive monthly lines, there appears a negative line, followed by a positive line, and then a significant adjustment may occur.
I looked into it, and historically it seems that after four consecutive positive monthly lines, adjustments indeed could be significant.
Now, September is again a positive monthly line. This means we have five consecutive positive monthly lines, and historically, this occurrence is not very common.
Looking back over the past twenty years, there have been very few instances of five consecutive positive monthly lines, only 3 times.
Starting from August 2006, there was a ten consecutive positive monthly line.
Starting from January 2009, there was a seven consecutive positive monthly line.
Starting from May 2014, there was an eight consecutive positive monthly line.
Next, let's take a look at these 3 market trends.
Firstly, all 3 instances were doubling trends, with two of them being major bull markets.
The one in 2006 peaked at 6124 points in October 2007, starting from 998 points, an increase of 5126 points.
The one in 2014 peaked at 5178 points in June 2015, starting from 1849 points, an increase of 3329 points.
The one in 2009 was largely considered a major rebound; in August 2009, the peak was 3478 points, starting from 1664 points, an increase of 1814 points.
Looking at the specific trends.
August 2006 was the first major pullback in the bull market, after a consolidation around 1700 points, the monthly positive line appeared in August, followed by eight consecutive gains, reaching 4335 points, before another pullback.
In January 2009, after 1664 points, it found a bottom and stabilized, then a positive monthly line appeared, with seven consecutive gains until July 2009, before a pullback began in August.
In May 2014, after the right shoulder at 1974 points in March 2014, it found a bottom and stabilized, then a positive monthly line appeared, with eight consecutive gains reaching 3406 points, before starting a phase of adjustment.
If we have seven consecutive positive monthly lines this time, it will reach November.
If we have eight consecutive positive monthly lines, it will reach December.
Personally, I believe that in the last two months of this year, adjustments may be significant. In that case, there might only be six consecutive gains; a slow bull market is also possible.
So, if a negative monthly line appears next time, does it mean we should expect a phase of adjustment?
