Stocks Rose 94% Of The Time This Condition Was Met In January: Here's What Needs To Happen In 2023

The broad market S&P 500 SPY is up 2.58% since the start of 2023. That's one of the strongest starts ever for U.S. equity markets.

On the surface, that gives back just a small amount of the returns investors lost in 2022, but according to Ryan Detrick, those gains have a deeper meaning.

What Happened: Detrick, Chief Market Strategist at Carson Group Inc, who has come to be known as one of the leaders when it comes to bullish data indicators, said that when the SPY is up more than 2% in the first five trading days of the year, it ends the full year higher — 94.12% of the time.

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Detrick scoured data sprawling back to 1950, and found that when the SPY gained more than 2% in the first five trading days of the year, 16 out of the 17 times it has ended the year higher, dishing out an average of 17.8% gains.

Today is the 5th day of the year.

SPX up 2.7% (as of noon ET), which is one of the stronger starts ever.

When first 5 days >2%? Full year higher 16 of 17 times and up 17.8% on avg (since 1950).

Note - first 5 days were quite weak last year.

— Ryan Detrick, CMT (@RyanDetrick) January 9, 2023

Interestingly, he noted that the first five trading days of 2022 were weak. They were, and while the SPY lost roughly 20% last year, it lost 2.14% in the first week of 2022.

Why It Matters: As bad as 2022 was for investors, Detrick noted in a recent blog post that, since 1950, the only times that stocks have fallen in consecutive years were during the recession of 1973–1974. After that, stocks fell three years in a row during the tech bubble implosion of the early 2000s.

The market strategist thinks there is a good chance that stocks will rise by the end of 2023.

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