Feb

4

Yale Hirsch and his son Jeff have shown that a positive change, from the last trading day of the year to the 5th trading day of the new year, portends a bullish year (positive first 5-day percent change).*

Consider this … in the last 76 years of trading, the S&P 500 has declined for the year 20 times or 26% of the time. In other words, 74% of the time, there has been a yearly gain.

Jeff’s numbers show that in those last 76 years, 49 years showed a positive first 5-day percent change. Only 8 of those years went on to close down for the year. That’s an 84% bias for the year to close higher when we have a positive first 5-day percent change.

My add-on to Yale’s and Jeff’s work was to look at the years that gained 1.2% or more in the first 5 days of trading. There were 28 such years. Of those years, only 2 were down for the year. That’s a 93% bias for the year to close higher. What an improvement from the average 74%!

In 2026, the first 5-day** change for the Dow Jones 30 was +3%.

In 2026, the first 5-day** change for the S&P 500 was +1.6%.

Those 28 years had an average annual return of 14%. The remaining years had an annual gain of 5.3%. I see this as excellent confirmation of the bullishness of my Forecast 2026 Report.

Cagdas Tuna writes:

There is no need for a statistical analysis to assume any given year will be positive for US indices. It is almost guaranteed to be positive every year. No offense to any list member.

Larry Williams responds:

Wrong 24% of time we close down for the year.

Michael Brush is surprised:

Wow did not know it was that high.

Larry Williams agrees:

I was taken back by it as well.

Asindu Drileba asks:

2026 is bullish? But Senator, you said you expect a recession in 2026 with 100% certainty. Is this a contradiction? Or maybe its possible for the market to be bullish even during a recession?

Larry Williams answers:

Yes, there was a projection made a year ago for a 2026 sell off —in the last 12 months data changed—large improvements in fundamentals and hopefully I got a little better understanding of long term cycles. New Data matters.

Nils Poertner writes:

Asindu- there would be simply too many variables out to make that statement with such a certainty in advance. Just impossible. It remains a probability game. Used to subscribe to some cycle research that claimed to have things figured out yrs in advance. quite pricey subscription. it was HOOK, LINE and SINKER (for me).

Denise Shull comments:

New Data matters.

Indeed it does. Wonder why it’s challenging for many to incorporate?

Nils Poertner responds:

Good question. On this note… (Pure) data analysts believe pattern matching on large datasets will solve our problems. But what if the really vital information isn't being collected? What if it's invisible to our trained systems?


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