SPX 2025 7000+ The most likely scenario.

3 sty

Experts who forecast stock market collapses and peddle narratives of financial despair often refrain from investing in the very concepts they promote; otherwise, they would face severe financial ruin on a repeated basis.

From the very beginning of this decade, I have championed a bold, risk-taking stance, predicting that these years will be remembered as the roaring 2020's, a time marked by an echo bubble of the 1920's.

This era is defined by the powerful convergence of technology, artificial intelligence, and blockchain, all propelling asset prices to new heights. The wealth generated by these colossal corporations and blockchain innovations is accumulating and concentrating, leaving behind individuals who are not part of these transformative trends.

Meanwhile, everyday people are grappling with a significant inflationary wave, as the value of their fiat currency continues to dwindle. To compound the issue, in 2024 around 150,000 workers have been laid off from giants like Tesla and Microsoft, a direct result of automation.

In this relentless struggle, machines are emerging victorious.

The age-old saying that markets lack a reason to rise but require one to fall or underperform holds particularly true, especially in the good old USA.

It’s reasonable to think that 2025 will not replicate the precise calendar movements of 2024 so it's prudent to lean towards performance tracking other years such as...

2017, the SPX return stood at 18%, marking it as the year that most closely aligns with 2025, the inaugural year of Trump's presidency.

Fast forward to 2023, where the percentage rose to 24%, making it the nearest reference point in the short term. As we are predicting a continuation of the bull market.

Meanwhile, 2021 reached a peak of 29%, representing the euphoric climax of that cyclical bull market, a scenario that could very well repeat itself in 2025.

The emerging pattern for 2025 appears to be shaped by these three pivotal years. Given that we are now nearer to the conclusion of the bull market than its inception, it seems prudent to draw insights from the trends of 2021 and 2023.

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#ES breakout from the flagging down channel. Massive Bullish engulfing candle last week.
#SPX
6400 Soon.

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The "first five days" theory is a straightforward concept. Essentially, it posits that if stocks finish the initial five trading days of a new year with a positive return, the market is likely to experience overall gains throughout the following year.

Supporting this theory is a wealth of historical data. Since 1950, the S&P 500 has recorded net gains during the first five days of the year on 47 occasions. Remarkably, in 39 of those instances, the index concluded the year with an increase. This translates to an impressive success rate of 83% for the first five days theory.
#SPX #SP500

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To determine whether the returns of January truly predict the performance of the entire year, we analyzed the US stock market data from 1980, a time when 401K and IRA contributions became increasingly popular, up until last year. Our findings revealed a correlation of 0.41 between January's returns and the overall yearly performance, translating to an r-squared value of 16.8 percent—quite significant for a straightforward one-variable model.

The key insight is that this correlation strengthens progressively, starting from the first day of trading, through the first week, and culminating in the first month, all in relation to the annual returns. Notably, a 17 percent r-squared linking January's performance to the entire year's results is more substantial than one might initially expect.