Market Outlook - January 2021 (and beyond): How will it compare?
This series has followed a path since May 2020 using weekly data and Price Percent Oscillator ( PPO ). A PPO event trigger has been used for comparison against 14 previous large scale market declines over the last 100 years. Progress updates have been published using a monthly series of charts.
To start 2021, we are entering week 33 of 52 since PPO trigger crossing at May 2020 (red arrow at bottom) following prior low in March 2020. This is the 15th event compared to 14 previous historic market declines of similar large magnitude.
* Average of prior 14 events: +19.22% after week 32
* 2020 as 15th event: +27.09% after week 32
Note the chart's "Start" yellow arrow for comparison beginning at the PPO/Signal event trigger on 5/18/2020.
The Average gain for the 14 historic events at week 52 is +34.44% (forward from time of PPO crossing) shown using a second Yellow arrow for May 2021.
The current recovery is trending above average and can be compared to previous near/above average events plus average trend for 14 previous events. Interestingly, 7 of 14 are above average and 1 other close to, but slightly below, average after week 32. In all instances the forward result after week 52 is higher or equal to the current advance after week 32 (27.09%).
Looking ahead and comparing previous events at week 52:
2 of 7 finished at 27% (below week 52 average of 34%, but equal to current progress: 1970, 1974))
5 of 7 finished > 38% higher (4 of 5 between 38%-49%: 1921, 1942, 1958, 2009 and 1 of 5 at 58% higher: 1982)
1 slightly lagging week 32 average also finished slightly below week 52 average (but higher than current level: 2002).
1 laggard at week 32 rallied and finished above 52 week average (and had best overall result, 1932).
5 remaining laggards continued to lag and finished below the 52 week average (1940, 1962, 1966, 1988, 2001).
If the current path follows history, then downside after 52 weeks may be limited and upside is attractive with only 20 weeks remaining until benchmark week 52.
Fibonacci levels are shown using retracement from peak to low in March 2020.
Happy New Year!
To start 2021, we are entering week 33 of 52 since PPO trigger crossing at May 2020 (red arrow at bottom) following prior low in March 2020. This is the 15th event compared to 14 previous historic market declines of similar large magnitude.
* Average of prior 14 events: +19.22% after week 32
* 2020 as 15th event: +27.09% after week 32
Note the chart's "Start" yellow arrow for comparison beginning at the PPO/Signal event trigger on 5/18/2020.
The Average gain for the 14 historic events at week 52 is +34.44% (forward from time of PPO crossing) shown using a second Yellow arrow for May 2021.
The current recovery is trending above average and can be compared to previous near/above average events plus average trend for 14 previous events. Interestingly, 7 of 14 are above average and 1 other close to, but slightly below, average after week 32. In all instances the forward result after week 52 is higher or equal to the current advance after week 32 (27.09%).
Looking ahead and comparing previous events at week 52:
2 of 7 finished at 27% (below week 52 average of 34%, but equal to current progress: 1970, 1974))
5 of 7 finished > 38% higher (4 of 5 between 38%-49%: 1921, 1942, 1958, 2009 and 1 of 5 at 58% higher: 1982)
1 slightly lagging week 32 average also finished slightly below week 52 average (but higher than current level: 2002).
1 laggard at week 32 rallied and finished above 52 week average (and had best overall result, 1932).
5 remaining laggards continued to lag and finished below the 52 week average (1940, 1962, 1966, 1988, 2001).
If the current path follows history, then downside after 52 weeks may be limited and upside is attractive with only 20 weeks remaining until benchmark week 52.
Fibonacci levels are shown using retracement from peak to low in March 2020.
Happy New Year!