First, there are roughly equal numbers of down and up streaks in both sets of data. Second, the up streaks are spread out a bit more while the down streaks are more closely concentrated at the short end. For the long-term record, the average positive streak was 2.4 days while the average negative streak was 2.1 days. The following chart graphs the distribution of the streaks for both Rich s data and the long-term data. I d like to point out what might seem paradoxical but is important to understand the nature of streaks.
Short streaks are more common, but longer streaks make up much of the market record.
Which is more important depends on the question you are asking. However, if I were to pick a day at random, more likely than not, it would be part of a streak that lasted three or more days. If you were to look at the market action, you would find much of it includes streaks lasting at least three days. This pattern is still true even if we only look at streaks lasting four or more days. This is essentially similar to the observation that while millionaires are relatively rare among the population, they nevertheless own most of the country s wealth.