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Got another one this morning! After the 8:30 CT bell, the S&P 500 and Nasdaq futures both notched another high print on their belts. Dow futures came close, falling shy by just a few ticks, and then came roaring back about an hour later to complete the trifecta!
I wouldn’t necessarily say we’re off to a booming start, but the S&P 500 futures are up just over 1% since the Dec. 31 close, and has printed a new all-time high in 4 of the 6 trading sessions so far this year.
According to the Stock Trader’s Almanac (STA), the first 5 trading days of the year have a pretty good track record dictating how the rest of the year will go, specifically the S&P 500. When stocks trade higher during the first 5 trading days there is an 82% probability that the S&P 500 will close the year higher.
STA has been tracking the data since 1950 and found an average gain of 13.6% for this tendency. Coming off a year of above average gains across the board, some traders might be expecting a bit of a slowdown, especially since it’s officially been over a year since the last ‘real’ market correction…
All we can say is, if you insist on trying to fade this market, then the most basic risk management rules should apply. Scale your size down, don’t “adjust” your stops, and never, ever, add to a loser. Take profits when the market gives them to you, because this is still a dip buyers market!
