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Matt's Market Insights

Trading is quiet today with most major averages looking to close out the year near historical highs. We saw this same behavior last year as equities rallied to close off 2013, only to suffer nearly a 6% correction during the following January. We can see this play out in the chart of the S&P 500 below. The gray vertical line marks the turn of the last new year, and what appears to be a capitulation point for equities.

 

 

Historically, going back to the 1920's, January has been a strong month for stocks. If we look at the 1928 - 2014 period, January was the 4th best performing month of the year with an average gain of 1.2%. The top three performing months for the S&P 500 during this time frame are July and December at 1.5%, and April at 1.3%

 

Moving averages are a common way to assess an item's trend. Most of ... Log in or subscribe to continue reading.


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