How Does The S&P 500 Perform After 8 Consecutive Up Weeks? (Backtest, Results, Performance, Python Code)

The S&P 500 is the most followed index in the world. As such, it catches a lot of attention when it is up for many weeks in a row. But how does it perform after being up for eight consecutive weeks?

We observe that the S&P 500 yields an average return of 10.5% one year after experiencing eight consecutive weeks of gains.

This is better than any random 12-month period.

In this article, we will explore the historical performance of the S&P 500 after experiencing eight consecutive weeks of gains.

We will also show you the code we use to backtest it.

Let’s start.

What Does Eight Consecutive Up Weeks Mean?

When the S&P 500 is up 8 consecutive weeks, it’s a noteworthy event. Just take a look at the history of consecutive up weeks. It does not happen very often.

In fact, it has only happen 24 times since 1930. When it happens, the first thought is that it signifies strength and momentum, indicating strong future returns. However, others may argue that it is a sign that the index is overextended and is due for a pullback.

But to gain insights into how the S&P 500 typically performs after such a streak, let’s delve into historical data.

How Does The S&P 500 Perform After 8 Consecutive Up Weeks – Backtest

The strategy is simple: we buy after the S&P 500 has experienced eight consecutive weeks of gains and observe its performance in the subsequent one-month, three-month, six-month, and twelve-month periods.

The data is not adjusted for dividends. Here is the table showing all the signals and results:

As you can see, the S&P 500 is up 88% of the time one year after the signal is triggered. Moreover, it is up 10.5% on average.

It seems like the signal has strong predictive power, and it signifies continued upside rather than near-term corrections.

How Does The S&P 500 Perform After 8 Consecutive Up Weeks – Conclusion

To sum up, today, we showed you how the S&P 500 performs after 8 consecutive up weeks. As you learned, the index tends to be up 88% of the time one year after the signal is triggered. Although the signal is not triggered often, it has been confirmed that future returns are promising.

How Does The S&P 500 Perform After 8 Consecutive Up Weeks – Python Code

Here is the complete Python code for the strategy and backtest: