History Says These Stocks Are About to Outperform

The last 19 trading days in Japan have been CRAZY…

First, the Japanese stock market was up 12 days in a row. (I’m talking about Japan’s Nikkei 225 stock market index.)

It was the longest stretch of consecutive days of gains in 27 years in Japan.

After a 12-day run, Japanese stocks were due for a breather, right? Well, they got more than a breather… the Nikkei fell six out of the next seven days.

[ad#Google Adsense 336×280-IA]That’s the short-term picture of what has happened lately in Japan…

But what happens when you look a bit further out?

Is a multiday run of gains a sign of a top?

Or is it a sign of a strong market that is about to get stronger?

My True Wealth Systems research team recently gave me the answer.

And it will surprise you…

Most people think many consecutive days of gains are a sign of a top… But according to our True Wealth Systems computers, the prevailing wisdom is wrong. Based on history, Japanese stocks are about to outperform.

Let me explain…

Having a few consecutive “up” days is typical in a bull market. Three or four positive days in a row is no big deal. It happens often. But having many consecutive “up” days – like eight or more – is nearly unheard of.

Our True Wealth Systems computers tell us that eight or more consecutive “up” days is a good thing… particularly for Japanese stocks. Here are the details…

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Looking back over 35 years of data, Japan’s Nikkei index has only seen eight or more consecutive “up” days 7% of the time. But as the table above shows, Japanese stocks more than doubled their normal returns over the next three months, six months, and one year.

And after being up eight or more consecutive days, the rate for positive gains over the next year is 70%. That beats the 58% one-year winning percentage during all periods.

Yes, Japan’s bull market is well under way. But history shows that this recent extreme points to more gains from here.

Subscribers to my True Wealth newsletter have made a LOT of money in Japanese stocks already… But history tells us we should have more gains to come…

Take advantage of it!

Good investing,

Steve

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Source: Daily Wealth