It’s been a productive month for domestic equities, with the S&P 500 (SPX) on track to finish October positive for the first time since 2022, extending its positive streak to six consecutive months. Streaks of six months or longer only happen every three years or so, and our current streak is the longest since its streak from February to August 2021. With all-time highs becoming increasingly normal as the market continues pushing higher, should we expect the positive streak to end sooner rather than later?

To evaluate the impact of consecutive monthly gains, we looked at every month going back to 1950 and categorized them based on their positive streak length entering the month. The table below summarizes how often each streak length occurred and the likelihood of the following month being positive. Looking at the S&P 500 going back to 1950, there have been 23 positive streaks spanning six months or longer. Those instances took an average of 1.65 months before the index finally had a down month, which is slightly above the 1.55 months for all instances. Additionally, 16 of those 23 months continued the positive streak. Put simply, the next month was positive 70% of the time, which is again higher than the 61% for a typical month. Consequently, periods of continued strength are more likely to continue moving higher relative to a typical month. While the market continues gains in the presence of a streak, has that historically translated into returns?

Analyzing every month dating back to 1950, we can look at the forward return of the S&P 500 depending on its streak length coming into the month. Streaks of six months tend to see above-average long-term returns, with returns outperforming the average month after three months. Specifically, the market averages a one-year return of 11% when on a six-month streak, outpacing the typical one-year return of 8.1% by a notable margin.

Additionally, the performance of the market appears to gradually trend higher the longer SPX’s streak is, which is more apparent in the chart below. The six-month return for the S&P 500 during all months is 3.9%, represented by the dotted blue line. However, the actual one-year return depending on the length of its positive streak (solid blue line) is consistently above average when on a streak of three months or longer. Meanwhile, the typical one-year return for the S&P 500 is 8.1% (dotted green line), and the S&P 500’s forward return by streak length (solid green line) is above that baseline average when on a streak of two months or longer. Consequently, a longer positive streak is generally a sign of continued strength for domestic equities.

The most apparent rationale behind the phenomenon is our favorite eight letter word: momentum. The longer that trends establish themselves, the more weight or impact they carry behind them, which helps explain the greater outperformance given consistent prior gains. With the S&P 500 poised to extend its positive streak as October ends, we should have further confidence in the market’s strength as we look ahead to the next several months.  

International equities are having a banner year. The iShares MSCI ACWI ex US ETF (ACWX) is currently up over 28% in 2025 (through 10/29). If that was the final return for the year, it would mark the best annual return for the fund since 2009 (33%). We are also seeing ACWX outpacing the SPDR S&P 500 ETF Trust by nearly 11%. If we end the year at that mark, it would be the largest annual spread favoring ACWX since 2003. Of course, we could see a lot of change over the final two months of the year. Domestic equities typically see strong returns toward the end of the year, potentially due to return chasing during years of positive performance. Furthermore, we still see international equities sitting in the second position in our DALI asset class rankings. Domestic equities remain in first due to their long-term leadership over most of the past decade. Foreign stocks have been strong, just not strong enough to knock off US stocks, or at least not yet.

Many of the most recent improvements for international equities have come from Asia. This can be seen on the Asset Class Group Scores page, which classifies all ETFs and mutual funds into at least one of 134 different groups, then sorts those groups by the average fund scores of their respective constituents. The top 20 groups by average score include 10 international equity-focused groups. Four out of the top six groups are specifically focused on Asia. Japan takes the top spot, followed by China in third, then Super Pacific and Pacific Basin in fifth and sixth, respectively. The strength from Japan, South Korea, and China match up with the countries in focus during President Trump’s recent trip to Asia, but we have seen consistent strength from those regions long before Air Force One left the US.  

Japan has been one of the most consistent areas for international equities since April. The iShares MSCI Japan ETF (EWJ) has rattled off three consecutive buy signals on its default chart and just notched a new all-time high two days ago with a bullish catapult completion at $84. The fund carries a 4.74 fund score and is less than one-box away from giving an RS buy signal against the SPXEWI for the first time since 2008. Even with the recent breakout, EWJ remains in an actionable position with a weekly overbought/oversold (OBOS) reading in the 40s, highlighting a potential buying opportunity. Initial support can be seen at $79.

South Korea has seen extreme appreciation over the last several days, with the iShares MSCI South Korea ETF (EWY) gaining over 20% in the past 30 days to eclipse a 90% gain year-to-date. This rapid price rise has left EWY in a heavily overbought position, with a weekly OBOS reading north of 180%. Those looking to add focused exposure to South Korea may be best served waiting for a pullback or normalization in the trading band.

China has seen a very consistent technical picture over the past few months. This can be seen by the KraneShares CSI China Internet ETF (KWEB), which has held a fund score north of 4.00 since July, and currently has a near-perfect score of 5.73. We saw KWEB give an RS buy signal against SPXEWI last October, and it reversed back up into a column of Xs against the market proxy in August, showing a continuation of near-term relative strength. The default chart of KWEB gave five consecutive buy signals before retracting from multi-year highs earlier this month to give a sell signal. While a sell signal is never a great thing, the first sell signal in a strong uptrend is often indicative of a pullback rather than long-term weakness. The fund has since consolidated right at the middle of its trading band near $40. The weight of the technical evidence remains favorable in the long-term and seems to just be showing near-term consolidation. This could offer a more opportune entry point for those that have been waiting to add long exposure during the recent ascent. Initial support can be seen at $38.50 with further support seen just below at $37.50.

Daily Option Ideas for October 30, 2025