Trend Signal Now: After 2 years of 20%+ returns for S&P500

Sunday, January 5, 2025

There's no way the S&P500 can rally again this year, right?

We just had 2 consecutive years of historic returns. The Nasdaq literally doubled since the end of 2022.

Total Crypto Market-cap is is now at $3.4 Trillion. It was only $750 Billion 2 years ago. You do the math!

The S&P500 was up 24% in 2023 and then up another 23% in 2024.

How could things possibly get any better than this? I mean with the Fed, and the Inflation, and the Trump, and the Recession and the imminent crisis they all keep telling us about.

How could stocks possibly go up again in 2025? After the historic returns we just saw in back-to-back years?

Well, my friend Ryan Detrick put out a note saying that since 1950, after back-to-back 20% yrs, the S&P500 was up 20.0% on average and higher every single time (4 out of 4).

So not only is it possible for stocks to go up again, it's actually what has happened every single time, although to be fair it is a small sample size.

Nevertheless, the precedent is there.

This week was the end of the famous "Santa Claus Rally" period. This includes the last 5 trading days of the year and the first 2 of the following year.

Here are the final stats - down across the board:

As the saying goes, "If Santa should fail to call, the bears will come to Broad and Wall". Meaning that when stocks don't rally during this specific window, historically you'll be able to buy stocks at cheaper prices later on in the year.

But now we have the next seasonal indicator of the "January Trifecta", as our friend Jeff Hirsch puts it.

We are now two-fifths of the way done with the "First 5 Days of the Year Indicator". As the first 5 days of the year go, so goes the rest of the year, is the old saying. .

In other words, historically when they come in buying, they usually stay buying throughout the year. It's when they come in scared that things don't usually end well.

So far so good for the First 5 Days:

We had Jeff Hirsch, Editor of the Stock Trader's Almanac, on The Morning Show this week, and I asked him whether the Santa Claus Rally was more important or if the First 5 Days Indicator was more important.

He literally writes the book every year, for 58 consecutive years. So who would be better informed?

You know what he told me?

He said "Neither!".

Jeff points to the numbers and says that the January Barometer is the most important of the Trifecta.

This is the tendency for the rest of the year to follow what the month of January does.

We'll be talking about all these seasonal studies, where they fit into our more macro top/down thesis, and what we're doing about it for our strategies and portfolios.

Our LIVE Conference Call is tomorrow - Monday January 6th, but it's exclusive for Premium Members of ASC Research.

We're laying out the plan for January and Q1 during this call with very specific trade ideas that are actionable right now.

You can Sign Up Here with a RISK FREE trial or you can email Mary and see if you have any credits in your account that you can use towards your new membership.

This is one event you won't want to miss.

Join ASC Research today RISK FREE

See you in there!

JC Parets, CMT | Founder, All Star Charts

All Star Charts emails are a financial publication of general circulation and only offers impersonal advice, not tailored to individual needs of a specific client or group. Any comments or statements made herein do not necessarily reflect those of All Star Charts or its affiliates (collectively, "All Star Charts") and do not constitute buy or sell recommendations. Unless specifically indicated, this message is not an official confirmation of any transaction. The contents of any email communications to or from All Star Charts may be monitored or reviewed at All Star Charts's discretion. All Star Charts accepts no responsibility for any loss or damage arising in any way from the use of this transmission and any attachments; it is the responsibility of the recipient to ensure that they are virus free. If you reply to this email, please note that we are a public investor and do not want any material non-public information. We do not agree to keep confidential any information you provide and do not agree to any restrictions on our trading activity, except pursuant to a written confidentiality agreement executed by All Star Charts.

Want to change how you receive these emails? You can manage your preferences here

unsubscribe