Stock Market Outlook: Rare Trifecta Suggests Big Gains May Lie Ahead

Prediction   #indicator  

The stock market is on the verge of completing a rare bullish trifecta that suggests big gains in 2023, according to a Thursday note from Carson Group's Ryan Detrick.

#indicator: The trifecta consists of the S&P 500 generating positive returns during three overlapping periods at the start of the year.

The first period is the "Santa Claus rally" trading window, which consists of the last five trading days of the year and the first two trading days of the new year. The second trading window is the first five trading days of the year, and the third period is the entire month of January.

The S&P 500 has completed this trifecta 31 times since 1950, according to Detrick, and what usually followed was bullish for the market. The average full-year S&P 500 gain of those 31 years was nearly 18%, with a win ratio of 90%.