Now the "First 5 Days" of the year were up (+1.37%).
That's 2 for 2 so far in the January Trifecta.
So now what's next?
The January Barometer is the last leg of the early year triple crown.
"As January goes, so goes the rest of the year". According to my handy Stock Trader's Almanac, the S&P500 has an 83.3% hit rate for the full year when January is in the green.
So with more and more positive signs for stocks, it really shouldn't be a surprise to anyone.
Here's the performance of each of the Sectors since the new lows list on the NYSE peaked in Q2. Notice how Consumer Discretionary is the best performer. How can consumer discretionary stocks doing so well possibly be a bad thing?
Doing some basic math, the odds continue to favor a strong year for stocks in 2023.
There are some people out there who think the Nasdaq is the stock market. There are others who "only buy growth stocks".
I don't know what kind of masochist you need to be to think that way, but both of those are very foolish approaches to life.
The Nasdaq is full of growth stocks. And growth stocks historically underperform and make little progress when interest rates are rising. I'm not sure if you heard, but interest rates have been rising!
Since the Stock Market bottomed in June, the majority of stocks and sectors are up and to the right. It's only the biggest losers that are down, and there aren't that many of them. It's really just those nasdaq / growthy stocks that the masochists are focused on.
From a seasonal perspective, Pre-election years are historically some of the most bullish years we have in the market. Here's what the 4-year cycle looks like as we head into 2023:
One thing I know about this time of the year is that whipsaws thrive.
We call it Whipsaw Hunting Season.
The lack of liquidity, and lack of interest due to other life priorities, creates over-extended and exaggerated moves that otherwise would not be allowed to occur under normal supply and demand conditions.
But since the b-squads are on the desks, you regularly get failed moves this time of the year that result in very fast moves in the opposite direction.
For some great examples see $GDX in December 2016 and check out $TLT in December 2013, among many others.
These were nasty failed moves that ripped the short sellers' faces off into the new year.
We see these sorts of moves born around this time every single season. It's perfectly normal market (human) behavior.
So as we go hunting this year, Tesla really stands out as a potentially great candidate.
You go on the twitter and all you see are people complaining about what a bad year this is for stocks, how bad the stock market is, recessions, bear markets, the Fed, blah blah blah.
I don't understand. What's everyone so angry about?
Stocks continue to do well. In fact, the back half of this year has been one of the better ones that we've ever seen.
Look how well most sectors have done since the market bottomed in June: