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The Bull Thread

Discussion in 'Stock Market Today' started by bigbear0083, Apr 1, 2016.

  1. bigbear0083

    bigbear0083 Content Manager
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    January Almanac: Top Month in Pre-Election Years
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    January has quite a legendary reputation on Wall Street as an influx of cash from yearend bonuses and annual allocations typically propels stocks higher. January ranks #1 for NASDAQ (since 1971), but sixth on the S&P 500 and DJIA since 1950. It is the end of the best three-month span and holds a full docket of indicators and seasonalities.

    DJIA and S&P rankings did slip from 2000 to 2016 as both indices suffered losses in ten of those nineteen Januarys with three in a row, 2008, 2009 and 2010. January 2009 has the dubious honor of being the worst January on record for DJIA (-8.8%) and S&P 500 (-8.6%) since 1901 and 1931 respectively. Despite late-month weakness in 2018, S&P 500 still gained 5.6% and DJIA jumped 5.8%.

    In pre-election years, Januarys have been downright stellar ranking #1 for S&P 500, NASDAQ, Russell 1000 and Russell 2000 and #2 for DJIA. Average gains range from 2.9% by Russell 1000 to a whopping 6.6% for NASDAQ.
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    Onepoint272 likes this.
  2. bigbear0083

    bigbear0083 Content Manager
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    What Does 300,000 Jobs Tell Us?

    The December jobs report showed nonfarm payrolls grew by 312,000 last month, well above the median consensus estimate for a 184,000 increase. This was a record 99th consecutive month with positive jobs growth. The good news sparked a big equity rally on hopes that the U.S. economy remained on firm footing.

    What does a 300,000 monthly print tell us? First things first: Be aware that the labor market is constantly growing—so 300,000 jobs last month isn’t the same as 300,000 jobs back in the mid-1980s. In fact, the total number of employed people is about 50% higher now than it was then. Still, 300,000 jobs is an impressive increase and one that could suggest a recession is a ways off. “The most recent jobs figure could be a great sign that a recession is still a long way off, as the previous two cycles didn’t see recessions begin until 13 and 23 months after the last 300,000 print,” explained LPL Senior Market Strategist Ryan Detrick.

    As our LPL Chart of the Day shows, looking at the previous five cycles, it took an average of 12 months after the last 300,000 jobs print before a recession started—with the last two cycles actually taking longer. We remain in the camp that we probably won’t have a recession in 2019, and this is another potential bullet point to support that.

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  3. bigbear0083

    bigbear0083 Content Manager
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  4. bigbear0083

    bigbear0083 Content Manager
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    Positive Santa Claus Rally & First Five Days Brighten Light at Tunnel’s End
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    Solid across the board gains today lifted S&P 500 to a year-to-date gain of 2.7% at today’s close and thus our First Five Day (FFD) early warning system is also positive. Combined with last week’s positive Santa Claus Rally (SCR), our January Trifecta is now two for two. The January Trifecta would be satisfied with a positive reading from our January Barometer (JB) at month’s end.
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    The best case, most bullish scenario is when all three indicators, SCR, FFD and JB, are positive (in table above). In 30 previous Trifecta occurrences since 1950, S&P 500 advanced 86.7% of the time during the subsequent eleven months and 90.0% of the time for the full year. However, a January Indicator Trifecta does not guarantee the year will be bear or correction free. Of the four losing “Last 11 Mon” years, shaded in grey in the above table, 1966, 1987 and 2011 experienced short duration bear markets (2011, S&P 500 –19.4% peak to trough). In 2018, S&P 500 retreated 19.8% from its September high close to its December low close.

    Even if S&P 500 was to suddenly reverse course and finish the full month in the red, the prospects for the next eleven months and the full year remain fair. Of the last 10 years since 1950 that the SCR and FFD were both positive (and the full-month January was negative), the next eleven months advanced 80% of the time and full year advanced 70% of the time with gains of 7.4% and 2.9% respectively.
     
  5. bigbear0083

    bigbear0083 Content Manager
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  6. bigbear0083

    bigbear0083 Content Manager
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