Buying pressure across multiple time frames is historically high, according to SentimenTrader, signaling potential continued strength for the Dow Jones Industrial Average.
Jason Goepfert, senior research analyst at SentimenTrader, noted in a recent report that the Dow has risen in 152 of the past 250 trading days, a win rate of just under 61%. Similar consistency was seen in April 2010 and May 2018, both of which led to several months of choppy trading.
However, Goepfert highlighted that this momentum spans various time frames. Over the past 100 weeks, the Dow has risen in 60% of weeks, a marked improvement after a tough 2022. The index has also climbed in 63% of the past 60 months and 80% of the past 15 years, placing it among the top historical performers.
“The momentum isn’t limited to just one time frame,” Goepfert wrote, noting that this current level of buying pressure ranks in the top 6% of all historical readings since 1900. Excluding the 1995-2000 tech bubble, it would rank in the top 2%.
While extreme momentum has historically signaled exhaustion for some sectors, such as utilities, the Dow has typically seen strong gains after such periods. Goepfert noted that in other instances where the average up-periods across time frames exceeded 66%, the Dow rarely experienced losses and saw strong returns over the following nine months.
Interestingly, the Dow has risen at least 60% of the time across daily, weekly, monthly, and yearly periods only six times, and while post-signal returns haven’t always been stellar, Goepfert cautioned against immediate concern. When combining this with another key signal, which has only occurred twice before, the results were mixed—short-term gains followed by periods of stagnation, as seen in 1959 and 2017-18.
“The buying pressure across time frames is truly historic,” Goepfert concluded, “and while this has generally been a positive sign for 6-9 months, longer-term precedents become scarcer.” Bulls are now hoping that the current AI-driven rally can echo the sustained momentum seen during the late ’90s internet boom.
