Historical Statistics Suggest Bullish 2014 For Stocks

If history is an indication, the stock market could extend its rally into 2014.

U.S. stocks are up for a sixth-straight session, with the Dow gaining 3.4 percent, or its strongest six-day win streak since March 2012. So far this year, the S&P 500 is up 29 percent, on pace for its best yearly performance since 1997, while the Dow is up 25 percent, or its biggest annual gain in a decade.

The strength of the rally has been felt across the board. In fact, the Dow closed at a record 20 percent of the time in 2013, and 17 percent for the S&P 500.

The Dow is on pace for five years of consecutive gains, up 87 percent in that period—the best five-year increase since 2000.

Other major indexes like the Nasdaq Composite, Dow transports, Russell 2000 and S&P Midcap 400, are up more than 30 percent year-to-date, respectively.

But the rally may not be over. Since 1950, there have been 17 other instances when the S&P 500 was up more than 20 percent in a year. The index finished positive the following year 14 times, or 82 percent of the time.

When positive the following year, it finished with a gain of least 7 percent 12 times or 86 percent of the time.


This article is for general information purposes only. It is not investment advice or a solution to buy or sell securities. Opinions are the authors; not necessarily that of OANDA Corporation or any of its affiliates, subsidiaries, officers or directors. Leveraged trading is high risk and not suitable for all. You could lose all of your deposited funds.

Mingze Wu

Mingze Wu

Currency Analyst at Market Pulse
Based in Singapore, Mingze Wu focuses on trading strategies and technical and fundamental analysis of major currency pairs. He has extensive trading experience across different asset classes and is well-versed in global market fundamentals. In addition to contributing articles to MarketPulseFX, Mingze centers on forex and macro-economic trends impacting the Asia Pacific region.
Mingze Wu