Wall Street’s predictions for 2015 have been rolling in over the last few weeks.
Overall, all strategists highlighted by Business Insider expect the market to eke out gains in 2015, but only a couple of strategists expect gains to be near the roughly 11% rally the S&P 500 has enjoyed so far this year.
However, NYSE floor governor Rich Barry on Tuesday gave us a look at what some traders on the floor are seeing when looking forward to 2015.
And the short answer: big gains.
Barry writes that, “For hints and clues [about 2015], a few seasoned veteran floor-denizens dusted off their editions of the Stock Traders Almanac (for historical patterns)… Hold on to your helmets, because you might be surprised by some of their findings.”
What these traders found is that there are five big reasons why stock market bulls should be psyched about 2015:
- 2015 will mark, by far, the best year of the 4-year Presidential cycle, and especially in a President’s second term. Since 1939, the Dow has averaged a 16% gain, while the S&P 500 is up 16.3%, on average, in these years.
- According to the Almanac, years ending in ‘5’ have only had one down year in the last 13 decades. The average gain is 28.3% for the Dow and 25.3% for the S&P.
- In addition, for the current election cycle, the current quarter and the first 2 quarters of next year have produced average gains of 21% for the Dow and S&P.
- In the last 84 years there have only been 3 times where equity markets were up double digits 3 years in a row (2014 looks like the third-straight). In each of those occurrences, the 4th year was up an average of 23.1%.
- Pre-Presidential Election years have seen ZERO losers in 76 years.
So there’s that.
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