The beginning of the year might tell you the future direction of the stock market. The five days of trading, or more specifically the direction of the move, has an amazing track record when the direction is up. The last 38 up ‘first five days of trading’ have been followed 33 times by remaining year gains — that’s an 86.8% accuracy ratio. As the table below demonstrates, the track record since 1937 has been very impressive.
The S&P 500 is up 1.9% for the first four days of trading and is up again today pre-market, so is this an early sign that this will be a great year? As everyone now says, that depends on Europe and how this Friday’s trading will end.