Editor's note: Despite all the fear in the financial world, stocks are up in 2023... And the contrarian bet today is that the market will keep rising. Marc Chaikin – founder of our corporate affiliate Chaikin Analytics – agrees. Right now, he says an important signal with more than seven decades behind it is pointing to an incredibly bullish setup...
A 95% Chance of Double-Digit Gains in 2023 By Marc Chaikin, founder, Chaikin Analytics
Folks, we've endured a wild month... Stocks started March with a pullback from their early February high. And before long, the banking crisis made everything worse. The S&P 500 Index fell nearly 5% in a single week. So I get why many people might still be feeling shaken. But over time, the market gives us strong historical data. As investors, we can't deny that data. Today, I'm seeing a nearly indisputable signal in the market... Going all the way back to 1950, this signal has only led to losses for the S&P 500 over the next year on two occasions. And each of those times, the return was barely negative. Through 37 samples dating back 73 years, this indicator has a 95% positive rate. Even better, as I'll show you today, this indicator gives us an idea of what to expect from the S&P 500 for the rest of this year. And as investors, you're not going to believe it... The indicator we're looking at reveals that the market could hit an 18% total return this year. And as I said, this signal is correct 95% of the time. You see, this indicator is related to the S&P 500's lowest point in December. That low was 3,783.22 on December 28. You can see it on the following chart... 
Now, as you can also see in the chart, we've nearly completed the first quarter of 2023. And despite all its twists and turns, the S&P 500 stayed above that December low. That's an incredibly powerful signal throughout history... According to Carson Investment Research, this signal has happened 37 times since 1950. In every case except two, the S&P 500 produced a positive return over the next year. The two exceptions were in 2011 and 2015. But the worst result was a 0.7% drop. This is where the data gets really interesting... The average one-year return after this signal is 18.6%. And the median return is 18.1%. In other words... one or two big winners aren't skewing the results. Now, I understand that this might feel like a contrarian statement right now. It seems like many folks are still busy preparing for the next collapse. But the data is clear... The market is recovering. The S&P 500 is up nearly 5% so far this year. The Power Gauge recently turned "bullish" on the benchmark index. Now, this huge historical signal is behind us... The market is completing the first quarter of the year above its December low. History tells us that means big gains are possible through the rest of the year. And even if that doesn't happen, the downside should be relatively mild. That means our job is to find the best opportunities. I recommend you do the same. Good investing, Marc Chaikin
Editor's note: The data keeps piling up... You see, a rare signal just flashed in another indicator with a 100% track record. Going all the way back to 1950, it has identified 18 urgent "buy soon" setups. But it's critical to find the opportunities with the best chance of making outsized gains – especially if we see more near-term volatility during the new potential bull phase... That's why Marc and his newest analyst Briton Hill held an emergency broadcast this week. They revealed the No. 1 step you should take right now to position yourself for this shift... Get the full story here. Further Reading "A crucial shift is taking place in the depths of the stock market," Brett Eversole writes. Finally, more stocks are going higher than lower. We can see this by looking at an important signal of market breadth. And it means a major rally is likely on the way... Read more here. Investors were starting to feel cautiously optimistic. Then, folks panicked again as fear took over the banking system. It was a massive sentiment crash. But history shows it could be setting up a powerful bull run... Learn more here. |
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