The stock market's early January rally may not guarantee a good year for equities, but history indicates it's a good sign, according to Ryan Detrick, Carson Group chief market strategist.
The fact that it followed a so-called Santa Claus rally in the holiday season could strengthen that outlook and form a "trifecta of bullishness" if the market also winds up higher this month, he suggested.
"It's been a strong start to 2023, with stocks up nicely after the first five days," Detrick wrote in a blog post published Thursday. "Although we'd never suggest investing based on five days, this is something many people watch for clues as to how the year might go, and it has a solid track record."
When the S&P 500 is higher for the first five days, "the full year is higher nearly 81% of the time and up 14.0% on average," and when those days are lower, "the full year is virtually flat and up only 54% of the time," he said, citing average results from 1950 through 2022.
