Globe editors have posted this research report with permission of Capitalight Research. This should not be construed as an endorsement of the report’s recommendations. For more on The Globe’s disclaimers please read here. The following is excerpted from the report:
Our last market comment detailed the “First five days of January” indicator and mentioned that “going back to 1950, a positive first five says resulted in a full-year positive equity market 85% of the time.”
During the first five days of 2022 the S&P 500 Index lost 88 points or 1.8%. and by October the loss grew to 23%. During the first five days of 2023 the SPX gained 2.8%. Could the SPX gain 23% in 2023?
Not only have the markets gained during the first five days, but they triggered an extremely important indicator. One of the most reliable technical indicators is called the “Breadth Thrust”. This occurs when advancing stocks outnumber declining stocks by a 2:1 ratio during a 10-day period. This happened not only in New York, but also in Toronto. During the last 10 times this occurred since 1962, the market gained between 12.3% and 30.0%.
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Ron Meisels