Chart of the Week: First Q 4% Year End Performance

The S&P 500 index is up 4.38% YTD. History suggests when the market’s gain of 4%+ in Q1, it often presages double-digit moves – up or down – in the S&P 500 for the entire year.
Double Digit Full Year Gains & Losses (1956-2005)


Source:  Mike Panzner, Rabo

Since 1956, the market has gained 4% in 27 out of 49 Q1s, or 55% of the time. When that has occurred, the full-year sees a greater-than-10% rise or fall on 20 of 27 occasions (74.07%). Median double-digit gains over 12 months were +25.77%. Median losses were 13.09%.


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Quote of the Day: 

“Behold, my son, with what little wisdom the world is ruled.”
Count Axel Gustafsson Oxenstierna (1853-1654), from a 1648 letter to his son at the conclusion of the 30 Years War

What's been said:

Discussions found on the web:
  1. Tyrone Biggums commented on Mar 28

    hey beary, you backing off dow 6800 yet??

  2. jkw commented on Mar 28

    Those charts aren’t very useful. The difference in gains between years with a strong first quarter and years without one don’t look statistically significant. They might be, but those charts don’t show it. The one on the left especially contains almost no information. That’s the sort of variation I would expect to get by randomly choosing 27 out of 49 years.

    What are the median 12 month gains/losses for years without a 4% gain in Q1? Are those 12 month numbers for the 12 months including Q1 or the 12 months after Q1 ends? If it includes Q1, it is hardly surprising that a large percentage of the years that include 4% growth in one quarter would have at least 6% growth in the other 3 (though large losses including a quarter of large gains is somewhat surprising).

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