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A 92% Chance Stocks Are Higher in Three Months

By Brett Eversole
Monday, September 21, 2015

"Stocks have not yet tested the panic low from late August."
 
That's the big market news that no one is talking about, according to our friend Jason Goepfert of www.SentimenTrader.com.
 
Jason notes that stocks NOT testing their recent low is rare – it has only happened a dozen times since 1950. Importantly, it's a positive sign going forward...
 
"When we've gone three weeks from a low without coming within 1% of that low, it typically led to even more gains over the next several months."
 
We can't share Jason's exact research – that would be unfair to his subscribers. But what we can tell you is this: three months after this rare anomaly, stocks were higher 11 out of 12 times – or 92% of the time.
 
The average gain was 5.2%. That might not sound like much... But remember, these are three-month returns. And those gains came consistently, with only one losing observation.
 
Of course, we can't make our investment decision based on one single indicator. But this is one of several we've seen in recent weeks that points to a continuation of the current bull market.
 
(I recently told DailyWealth readers about another reason stocks could move much higher right here.)
 
We can't know the future. But history continues to line up in our favor. Indicator after indicator continues to show more upside is likely in U.S. stocks.
 
The recent decline has shaken most investors. After four years of uninterrupted gains, most of us forgot what a correction feels like. But this is normal. And indicators like this one make me believe we're NOT at the start of the next bear market.
 
I could be wrong, of course. And that's why we always recommend using – and following – stop losses on all of your investments. This will limit your risk no matter what the outcome is in stocks.
 
However, Jason's research is clear...
 
Stocks haven't tested their recent six-month low. And that points to higher gains from here. This indicator has been right 92% of the time since 1950. And it's one more reason I believe the bull market in stocks is far from over.
 
Good investing,
 
Brett Eversole




Further Reading:

Earlier this month, Brett shared another indicator that shows why investors shouldn't be scared of the next "big one" right now. "After a volatile two weeks, the popular opinion is that it could be starting now... But history says something entirely different," he says. Get the details here: Why Now Is the Time to BUY Stocks.
 
There's one stock in particular Brett says could take off from today's levels. History shows that this health care giant could see hefty gains over the next few months. Get the details here: One of the World's Strongest Businesses Just Went on Sale.

Market Notes


NEW HIGHS OF NOTE LAST WEEK
 
Eli Lilly (LLY)... Big Pharma
Greatbatch (GB)... pacemakers
D.R. Horton (DHI)... homebuilder
NVR (NVR)... homebuilder
JetBlue Airways (JBLU)... airlines
Royal Caribbean (RCL)... cruises
Expedia (EXPE)... online travel
H&R Block (HRB)... tax service
Cablevision Systems (CVC)... cable television
T-Mobile (TMUS)... telecommunications
Activision Blizzard (ATVI)... video games
Under Armour (UA)... sports retailer
Campbell Soup (CPB)... food
Constellation Brands (STZ)... booze

NEW LOWS OF NOTE LAST WEEK
 
Sunoco (SUN)... oil refining
Coeur Mining (CDE)... precious-metals mining
DuPont (DD)... chemicals
Huntsman (HUN)... chemicals
ArcelorMittal (MT)... steel
U.S. Steel (X)... steel
Titan International (TWI)... farm and construction wheels
Kennametal (KMT)... cutting tools and drill bits

premium teaser

Another country setting up to rally within a few months...
 
‪Investors hate Canadian stocks... And that could create an opportunity in the near term.
 

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