Even though today turned out to be a mixed day for the market(DJIA (NYSEARCA:DIA)down, S&P 500 and NASDAQ(NYSEARCA:QQQ) up), S&P 500 is still positive year-to-date (2.8%) 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.
Even if S&P 500 (NYSEARCA:SPY) was to suddenly reverse course and finish the full month in the red, the outlook for the next eleven months and the full year remain quite good. Of the last 39 years since 1950 that the SCR and FFD were both positive, the next eleven months and full year advanced 87.2% of the time with gains of 11.5% and 14.0% respectively.
A positive SCR and FFD are encouraging and further clarity will be gained when the January Barometer (page 16, STA 2018) reports at month’s end. A positive January Barometer would further lift expectations for solid full-year gains.