This indicator has NEVER been wrong. BIG STOCK MARKET GAINS AHEAD
If you’re concerned about the sustainability of the Trump rally. Don’t be! According to this indicator, which has never been wrong, the US stock market is likely to see significantly higher gains from here.
Since 1945 there have been only 27 years where the S&P 500 has risen in both January and February. The 28th year has just been recorded. In every one of those prior 27 years, the index finished with a positive total return, averaging an incredible gain of 24%.
CFRA’s chart (from MarketWatch) illustrates this.
This year, the S&P rose by 1.8% in January and 3.7% in February. This bullishness is being seen in all the major US stock market indexes with the S&P, Dow, Nasdaq and Russell 2000 all reaching intraday all-time highs last Wednesday. The S&P broke above 2,400 for the first time, and the Dow closed above 21,000 for the first time after only one month ago, breaking the all-important psychological 20,000 level for the first time on January 25.
If this year ends with a 24% total return, just like the average return of the past 27, then this implies investors still stand to make an above average return even if they were to put money to work for the first time today. That is, this indicator implies there is a further 16% potential gains still to be made this year.
Of course, “past performance is no guarantee of future results”, but there are encouraging signs that the bull market has plenty left in the tank.
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The information contained in this report is General in nature and has been prepared without taking into account your objectives, financial situation and needs.