Market Nearly Perfectly on Track to Deliver 15% Median, One-Year Gain as Suggested Last August
On August 15 last year in this post we noted that if the market closed that week above 12,982 there was a 91% chance it would be higher one year later, with a median expected gain of 15%.
The market closed that week at 13,275.
That post was, and remains, password protected as we believe the analysis in it has proprietary value we care not to share freely with others.
Having said that, we provide the table from that post below so that others can get a sense of what the forward returns have looked like across different intervals when the Dow has, in the past, displayed the statistical properties it was displaying last August which led to the title and conclusions in our original post.
Here are the items from the table that stand out when the market provides the signal it was providing last August:
- 91% of forward one year returns are positive with median gain of 15%
- Max one year gain of 45% nearly 3x as large as max one year loss of 18%
- Median one year return is 2.3x as large as median one year return across all periods
So, fast forward eight months from our original post to today and what has occurred?
- The Dow is up 11.7% to 14,831 vs. its close of 13,275 as of the week of our original post
Not bad predictive ability and had you been looking at the latter table from the outset, you would have disregarded the perma-doom that perpetuates nearly all blogs and media outlets and would have been buying the market hand over fist!
Question is, with four months left until the one year mark vs. our original post, can the market eke out some more upside to fulfill the expected ~15% median gain from the statistical table above by August of this year?