First Five Days Positive - January Trifecta 1 for 2 By: Christopher Mistal | January 09, 2025 | Email | Print

As of the market’s close on the fifth trading day of the year, January 8, S&P 500 gained 0.6% year-to-date and thus our First Five Days (FFD) indicator is positive. Since 1950, the previous 48 positive (up) FFDs were followed by 40 up full years and 8 down years with an average gain in all years of 14.2%. Of the 8 down full years, losses were double digit in just three; 1966 (–13.1%), 1973 (–17.4%), and 2002 (–23.4%).

 

 

The Santa Claus Rally (SCR) was negative, but the FFD was positive. At this juncture there are two possible outcomes remaining for our January Indicator Trifecta. Our January Barometer (JB) can either be positive or negative. Because there has only been one year since 1950 when the SCR and JB were negative with a positive FFD (2015), we have combined both outcomes into a single table. 

 

 

Removing 2015 and its negative JB from the limited data set above, yields an 11-month average gain of 8.6% and full-year average of 14.8% which is similar to historical average performance following all past positive FFDs in the table above. 

 

We remain bullish, and our base case scenario outlined in our 2025 Annual Forecast is still in play. A positive FFD does ease some of the concerns caused by the lack of a positive SCR, but it does not completely assuage them. Depending on how the market trades for the rest of January and the result of our JB, we may adjust our outlook. We will also be tracking the December Low Indicator (2025 STA, page 36) with its line in the sand at the Dow’s December closing low of 42326.87 from 12/18/2024.