US Market Set Up for a Win this Year

US Market Set Up for a Win this Year


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.

Stay tuned…

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Paul Ebeling

Paul A. Ebeling, polymath, excels in diverse fields of knowledge. Pattern Recognition Analyst in Equities, Commodities and Foreign Exchange and author of “The Red Roadmaster’s Technical Report” on the US Major Market Indices™, a highly regarded, weekly financial market letter, he is also a philosopher, issuing insights on a wide range of subjects to a following of over 250,000 cohorts. An international audience of opinion makers, business leaders, and global organizations recognizes Ebeling as an expert.

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