Ides of February

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The Dow Jones Industrial Average has smashed through the 20,000 mark. The S&P 500 Index is up 27% over the last year.

Research firm FactSet sees earnings on pace to rise 4.2% year-on-year. If so, Corporate America may report positive earnings for all of 2016, snapping a multi-year losing streak.

What could go wrong? Beware the ides of February, technical analysts say.

 

 

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Winter Slump

An interesting post on Value.com notes that historically February has had more than its share of stock market corrections.

That’s especially true in a post-election year.

 

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 “Since 1950, the month of February is one of the weakest months of the year for the S&P 500, gaining just 0.03% on average and rising only 55% of the time. Looking only at post-election years, the S&P 500 loses 1.8% on average in February, making it the weakest month of the year.”

 

 

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Source: Bespoke Investment Group

 

Bullish Sentiment

Meanwhile, in my view, investors are surprisingly ho-hum about the stock market’s future direction, despite the strong gains of late.

Bespoke Investment Group points out the latest bullish sentiment reading of 35.8% tracked by The American Association of Individual Investors.

That’s the 110th straight week that bulls have been in the minority and below 50%, according to Bespoke.

 

Photo Credit: Zach Dischner via Flickr Creative Commons