It appears the early May "hit" on silver was the spark of a major downturn for commodities and stocks. Since that overnight event was clearly manufactured, odds are good that the cascade effect on stocks was just Part B of the plan. As noted in the table below, the S&P losing streak is approaching historic proportions. Unfortunately again, almost every junior is being sold off at multiples higher than the losses experienced by the blue chips.

Regards - VHF

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Make It Six Straight Losing Weeks

B.I.G.

June 8, 2011

This is turning out to be one for the record books. Barring a significant rally over the next two trading days (it could happen we guess), the S&P 500 is set to close lower for the week once again, which would make it six consecutive losing weeks for the index. This would be just the 17th time in the S&P 500's history dating back to 1928 that the index suffered a six-week losing streak.

Below is a table highlighting the prior 16 six-week losing streaks for the S&P 500. In the table we show how the index has performed in week seven as well as over the next six weeks. As shown, the S&P 500 has tended to finally bounce back in week seven in the past with an average gain of 1.03% with positive returns 13 out of 16 times. The average return for all one-week periods going back to 1928 has been 0.13%, so the 1.03% average seen in the week after six-week losing streaks represents pretty significant outperformance. In the six weeks following prior six-week losing streaks, the S&P has averaged a gain of 1.13% versus an average of 0.81% for all six-week periods, which also represents outperformance.

The last time the S&P 500 had a six-week losing streak was back in July 2008, and even then, when the financial crisis was really getting started, the index managed to gain over the next week and six weeks.