Over 1991, the last time the S&P 500 jumped over 10% in January and February, the benchmark index gained an additional 14% over the following 10 months. Furthermore, in the other five years when the index added at least 10% at start of a new year, it increased over 6% from March through December three times.
In another bullish signal for U.S. stocks, the NYSE advance-decline line, a popularly viewed indicator of market breadth that follows the number of stocks rising minus the number falling each day, has reached new highs.
“In order for a rally to really take shape and be long term, you have to have market breadth,” Nick Giacoumakis, president and founder of New England Investment and Retirement Group, told the WSJ. “By having a much broader advance-decline line, that signals this is a rally that potentially has more legs.”
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