A Fascinating Cycle in the S&P 500's ($SPX) Century-Long JourneyExplore this intriguing pattern in the S&P 500's performance over the past century, as highlighted by analyst Jay Kaeppel at Sentimentrader:
- The Mid-Decade Boost:
Remarkably, the 18-month period starting from October of a '4' ending year to March of a '6' ending year has consistently seen positive growth in the equity markets for the last ten decades
- Visual Evidence:
The accompanying chart illustrates the S&P 500's SP:SPX performance over the last 100 years, specifically highlighting the gains from October of years ending in 4 to March of years ending in 6
- Historical Success:
We're on the cusp of this period once again. Historically, this timeframe has been lucrative, with the 1930s showing an impressive 64% return, while the 2010s saw a more modest, yet positive, return of about 4.5%. On average, returns of 35.8% were achieved during this periods
- Cautionary Notes:
While history provides a pattern, it's not a definitive predictor. Major fluctuations can and do occur
Moreover, Jay points out that the current Shiller PE ratio stands high at 36.83 this October, potentially capping the upside when compared to starting points past decades in October of years ending in 4
-> Your Thoughts?
Given this historical trend, do you believe that the trend in this decade will be positive again in the next 18 months, or do you believe that the current economic indicators make the patterns of the past irrelevant?
