Continued Momentum for the S&P 500?

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My last blog was titled “A Start to Remember for the Markets”—and it’s a story that continues to play out as we move further into 2024. With March’s closing price, the S&P 500 is now up 10.16 percent on the year. Today, we’ll look at a few different aspects of the S&P 500, including its 2024 Q1 return and its five-month return, as well as the relative strength index.

A Notable Q1 Return

The 2024 Q1 return came in above 10 percent, marking just the third time since 1957 that the S&P 500 saw a Q4 return and the following Q1 return both finish up in double-digit percentages. Considering this is a very small sample size, it’s worth taking an in-depth look at its strong Q1 return.

Since 1957, the S&P 500 has posted a Q1 return greater than 10 percent only 12 times, including 2024. The other 11 instances generated a median return of 8.19 percent over the following nine months, with only one of the prior 11 instances seeing a negative nine-month return.


An Impressive Five-Month Run

Since the S&P 500’s October 2023 closing price, the index has galloped 25.29 percent, marking the 10th time that the S&P 500 has run more than 25 percent over a five-month period. Here, we should note two recurring themes I’ve covered in my recent blog posts:

  1. Strong returns historically tend to lead to more strong returns, especially strong returns preceding down periods in the markets.
  2. Momentum in the markets can go on for quite some time, which is why we often hear “don’t fight the trend” when it comes to the markets.

Below is the return data for those nine prior instances.

return data

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