The Dow missed its 14th straight gain — A coin flip could have done that

The Dow Jones Industrial Average closed antagonistic connected Thursday, breaking a 13-day triumph streak successful which the blue-chip scale gained 5.3%. It besides missed the accidental to necktie its longest rally connected record: a 14-session tally successful 1897.

But here's the thing: Regardless of whether the Dow made that 14th consecutive gain, basal probability tells america that we volition get this benignant of streak each erstwhile successful a portion naturally. It's benignant of similar a mentation of the celebrated "Gambler's Fallacy" successful which radical erroneously judge that an antithetic streak successful a roulette instrumentality means thing for aboriginal outcomes, erstwhile you'd really expect agelong streaks to hap connected occasion.

We tin adjacent amusement that these streaks aren't that antithetic from a effect of a coin flip.

CNBC ran a simulated coin flip thousands of times and counted the fig of times "heads" came up successful a row. Treat those similar regular gains successful the banal market. Remember, these are wholly autarkic events wherever the result is not affected by the anterior simulation.

Since the Dow's inception successful 1897, determination person been astir 33,000 trading days. In that time, we've seen a azygous 14-day streak of gains and 2 streaks that ended astatine 13 affirmative sessions successful a row. Prior to this week, the past 13-day rally was successful January 1987.

In our simulation of flipping a just coin 33,000 times and signaling the fig and magnitude of "heads" streaks, we really got precisely the aforesaid arsenic the existent Dow: a azygous 14-day rally. With a coin somewhat biased toward "heads" (in this case, giving the results of each flip a 0.523 accidental of being heads), our simulation turned up 2 rallies of 14 days, and 3 streaks that ended astatine 13 days.

In the satellite of banal marketplace speculation, pundits similar to property explanations for each twist and turn. But conscionable by utilizing the 50-50 presumption of our theoretical coin, we tin amusement that agelong streaks are not arsenic bonzer arsenic they whitethorn seem.

-CNBC's Gabriel Cortes contributed to this report.