The Dow is seeing its longest weekly win streak in almost 24 years.
It’s tracking to see its ninth positive week in a row.
But according to National Securities’ Art Hogan the win streak could go badly at anytime.
“We’re probably going to have a bit of a consolidation period in front of us,” he said Wednesday on CNBC’s “Trading Nation” — pointing to the sheer magnitude of gains in a short time span.
When the Dow’s 10-week win streak ended on May 12, 1995, it fell 2 percent the following week. Ultimately, the blue chip index was flat over the next month.
This time around, Hogan predicts a more volatile outcome.
“If you look back to the December low and the 18 percent pop we’ve had since then, … it makes sense to have a week or two of consolidation,” he said.
Hogan, who has a 2,850 year-end target on the S&P 500, wouldn’t advise going to cash if a sell-off strikes.
If his consolidation forecast takes shape, he recommends putting money to work in health care, industrials and technology — excluding social media names due to potential regulatory headwinds. He lists attractive valuations and growth potential as reasons to consider buying them.
“Even if we trace half of the move since Dec. 26, it gets you down 8 or 9 percent,” Hogan said. “That would be a significant place to be thinking about getting more involved in some of those sectors.”
In just the first eight weeks of this year, the Dow and S&P 500 have rallied by 11 percent.