S&P And Nasdaq Are Up 5 Consecutive Months. Russell Is Up 6 Consecutive Months. What’s Next?

With a little more than 1 week left in August, it looks like the S&P 500, Nasdaq, and Russell 2000 will all close higher this month vs. the previous month. In other words, unless the stock market makes a downwards reversal next week, the S&P and Nasdaq will be up 5 months in a row while the Russell will be up 6 months in a row.

Here’s what happens next (historically) when the S&P goes up 5 consecutive months.

Here’s what happens next (historically) when the Nasdaq goes up 5 consecutive months.

Here’s what happens next (historically) when the Russell 2000 goes up 6 consecutive months.

Click here to download the data in Excel.

Conclusion

As you can see, the S&P 500 going up 5 months in a row is a sign of extreme strength in the U.S. stock market. Even though the stock market might make a short term pullback and break the winning streak, strength usually begets more strength in the medium-long term.

Another interesting point is that while the Russell and NASDAQ have been leading the S&P 500 year-to-date, that might start to change over the next 12 months. The Russell and NASDAQ might start to lag, which means that Dow will start to lead. This is called sector/index rotation.