Although the market took a breather today giving back a portion of yesterday’s surge, it is not all that likely to manifest into anything more than a brief bout. In addition to our positive January Trifecta signaling further gains are quite likely, the history of S&P 500 gains in January and February offers further support for continued strength.
In 87 years going back to 1930, S&P 500 has been positive in January and February 33 times. Strength continued into March in 22 of those years and the full year was up 29 times. The record further improves when examining the data since 1950. This is the earliest year we consider to represent the beginning of the modern era. Since 1950, S&P 500 has advanced 19 out of 26 times in March following gains in January and February and was positive for the full year 25 out of 26. Average March gains in all 26 years were 1.4% while the full-year averaged 19.5%.