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This Stock Market Indicator Has Never Been Wrong

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This Stock Market Indicator Has Never Been Wrong

Every investor knows there's never a 100-percent chance of success, but there's at least one indicator that has been right every time over more than two decades.

Each and every time over the past 23 years the S&P 500 index gained more than 7.5 percent within the first 100 trading days of the year, it has never closed at the end of the year lower than when it began that year, according to a recent CNBC "Trading Nation" segment.

A Perfect Record

Ryan Detrick of LPL Financial is credited with discovering the encouraging data, and it bodes well for bullish investors, as the S&P 500 index achieved a 7.5 percent gain on April 4. Should the tried-and-tested theory hold true in 2017, the S&P 500 index will close on the final trading day in December above 2,250.

Bill Baruch — iiTrader's chief market strategist — was a guest on the "Trading Nation" segment and threw his support behind Detrick's thesis, which is expected to go a perfect 24 for 24.

The S&P 500 index is showing "tremendous support" at the 2,290 and 2,300, Baruch said. But if the index were to slip lower, it could find support at the 2,250 level, which represents the 200-day moving average.

"At that point, if we get into the end of the year, I think the market will edge up as it always as," Baruch said. "For that reason, I do not think this streak will break, and even if the market finishes lower than this, we will be above 2,300."

Baruch did caution that the volatility index historically tends to pick up in the summer months, and this year shouldn't be any different.

Related Links:

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