An ‘extremely rare’ stock market signal with 100% accuracy is flashing, pointing to record highs in 2024

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  • Stocks could hit record highs in early 2024 after just flashing an “extremely rare” signal.

  • That’s according to Carson Group chief market strategist Ryan Detrick, who highlighted another sign that breadth is improving.

  • “We still expect stocks to perform well and we remain overweight equities,” Detrick said.

The stock market just flashed an “extremely rare” signal that suggested to Carson Group chief market strategist Ryan Detrick that record highs are on the way.

Detrick highlighted in a report on Thursday that more than 60% of components S&P 500 Index It hit a 20-day high last week. That goes against the idea that big tech companies are driving most of the stock market’s gains.

“Last week, we saw a very rare big move higher, which indicated that many stocks were surging, which is often a sign of impending strength,” Detrick said. “This is extremely rare and indicates that there has been a lot of buying recently, Instead of going up.” Just in some big stocks. “

This rare signal has flashed 15 times since 1972 (not including last week’s signal). One year later, the S&P 500 was higher 100% of the time following that signal flash, with an average return of 18%.

If a similar gain occurs next year, the S&P 500 will trade just above 5,400, over Even the most optimistic stock market predictions.

S&P 500 Index ReturnsS&P 500 Index Returns

Carson Group

Detrick emphasized that there have been other bullish signs for stocks in recent weeks, The S&P 500 Index soared 8.9% in November, marking its 18th best month ever.

When measuring the S&P 500’s best 20 months, stocks were up 80% of the time one year later, with an average gain of 13%. And when counting the 30 months in which the S&P 500 historically rose at least 8%, stocks continued to rise 90% of the time the following year.

“This again suggests that the force we just saw may be the beginning of something stronger, not the end,” Detrick said.

Finally, he noted that the S&P 500 has not hit a new all-time high since January 2, 2022, nearly two years ago. The stock is within 5% of its new high, Detrick said he expects a new all-time high in early 2024, which would be an even more bullish sign if that happens.

“Previously, stocks didn’t hit a new high in at least a year, and then hit one, and future returns were very stable. In fact, one year later, stocks were up 13 out of 14 times, up an average of 14.9% after a long period without a new high. New highs and then finally reached it,” Detrick explained.

Combined with the “extremely rare” technical breadth thrust signal that flashed last week, all signs point to a continuation of the bull market in 2024.

“Any one of these signals on its own could be considered random, but when you start stacking them all up, we still expect stocks to do well and we’d still be overweight the stock,” he said.

Read the original article business insider

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