NEW YORK, June 2 (Reuters) - The Nasdaq's tear over the last four months could
well be a harbinger of more gains to come for the tech-heavy index and the stock
market in general, according to MarketHistory.com.
The Nasdaq Composite index .IXIC along with the Dow Jones industrial average .DJI and the broad Standard & Poor's 500 index .SPX have a tendency to keep on rallying after the Nasdaq posts a four-month winning streak, according to New Orleans, Louisiana-based MarketHistory.com.
"If history is a guide, that's what it seems to imply," Gibbons Burke, MarketHistory.com's editor, told Reuters.
Since its inception in 1971, there have been 22 four-month winning streaks in the Nasdaq's history, not counting repeat occurrences that happened within six months of another streak. In 15 out of the previous 21 cases, the Nasdaq has gone up again for a fifth month.
The Dow has has been up 57 percent of the time in the month after a four-month Nasdaq streak and the S&P has been up 62 percent of the time.
"We're not going to say here that markets always go up (after a four-month streak)," Burke said. "We just try to give betting odds."
Looking further down the road, after a four-month streak, the Nasdaq has been up 76 percent of the time six months later and about 81 percent of the time 2 years later.
The Dow and the S&P have had gains for three straight months, but according to Burke, hitting a four-month streak is more significant because it isn't as common.
The rally since mid-March has lifted the Nasdaq about 27 percent, the Dow about 19 percent and S&P about 22 percent.