$DIA, $SPY, $QQQ, $RUTX, $VXX
As February 2018 comes to a close, the S&P 500 has marked a big win and is set up for a winning year, if history is out guide.
With a 3.7% gainer on this month, the benchmark for American stocks is on track for back-to-back gains at the start of a year for just the 28th time since Y 1950.
In all but 2 of the prior cases, the index rose over the next 10 months, with the advance averaging 14% according to the data.
DJIA and S&P 500 have risen nearly 12% YTD as the Fed softened its stance on tightening monetary policy and Congress reached a deal to avert a costly government shutdown.
This strong start showed some signs of fading in recent weeks, as trade tensions persisted and investors came to grips with a potential slump in corporate earnings.
But, this historical data may well embolden Bulls worried the run North has gone too far, too quickly.
The S&P 500 is now 2.7 lower than the average year-end target among strategists surveyed, about 3% off its all-time high set in September.
The Bears may also find some comfort in the data.
The last time stocks started a year this strongly back in Y 1987, they declined 13% in the next 10 months, with much of the pain coming on October’s Black Monday.
The other time stocks failed to rally after gainers in the 1st 2 months was in Y 2011, when the US sovereign credit rating was downgraded.
So, with that in mind, pay attention and remember always take what the market gives.
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