Is a Bear Market Just Around the Corner?

If stocks struggle during February, it could be a warning of more market pullbacks to come. [Shield] AN OXFORD CLUB PUBLICATION [Profit Trends]( [View in browser]( SPONSORED [$10 Stock Creates 3D-Printed Rollable Smartphones??]( [Rollable Smartphones]( Apple is reportedly collaborating with the company on a $330 million facility to add its tech to the iPhone and iPad. [See why this $10 company could be the "Ultimate Growth Stock."]( Editor's Note: On April 28, The Oxford Club will host its 24th Annual Investment U Conference in San Diego, California. The city is beautiful, but this exclusive event is about a lot more than fun in the sun. Attendees at last year's Investment U Conference received no fewer than 35 winning recommendations from our experts. Those recommendations included a 57% win on Vuzix Corp. (Nasdaq: VUZI) in less than a month, a 101% gain on Tesla (Nasdaq: TSLA) in approximately eight months and an amazing 258% win on the cryptocurrency Avalanche (AVAX-USD) in six months! [To learn more about this year's exclusive conference, click here.]( - Kaitlyn Hopkins, Assistant Managing Editor IN CASE YOU MISSED IT [Video - Just What the Doctor Ordered]( [Watch Now]( [Why Investors Must Watch February Closely]( [Matthew Carr | Chief Trends Strategist | The Oxford Club]( [Matthew Carr]( You may be familiar with the oft-quoted market adage, "As January goes, so goes the rest of the year." It's based on the idea that the S&P 500 Index has finished the year with a gain 86% of the time whenever January closes higher. But in reality, since 1929, the S&P has closed out the year with a gain just 69% of the time that January has closed higher. And over the last 30 years, the S&P has closed with an annual gain 23 times. The markets have ended January higher 15 times in that span. And the markets saw a gain in January and finished the year higher a total of 13 times. That's basically how investors got the 86% success rate mentioned above (13 is 86% of 15). But I'm not a huge fan of this bit of [Wall Street wisdom](. There's very little correlation between what happens in January and where the markets finish 11 months later. That said, there's one month that I believe truly sets the tone for the year. And that's February. The Eighth-Best Month Since 1993, the Dow Jones Industrial Average has averaged a gain in February. And that puts February among the "good months" for stocks. It is at the bottom of that list, though... [Chart - Average Monthly Gain of the Dow]( February is technically the eighth-best month of the year for investors. The only months worse for the markets are January, June, August and September. But it's important to note that [the volatility and panic]( that typically rattles investors in January doesn't often carry over into the shortest month of the year. In fact, since 1993, the markets have continued January's sell-off into February only five times - in 2000, 2003, 2008, 2009 and 2020. But those were "all hands on deck" moments. And for two different, distinct reasons. In 2000, 2008 and 2020, [the broader markets]( imploded. Bear markets were born as sell-offs in January gained speed in February. Warning bells sounded. In 2003 and 2009, the continuation of the pullbacks that began in January marked bottoms in February. And these [signaled great buying opportunities]( as the sell-offs exhausted themselves. SPONSORED [5G Stock CRUSHES Earnings!!]( [5G SuperStocks]( Wall Street is loading up on shares of one 5G SuperStock (with more than $2 billion invested!). Why? Because the stock brings in more cash than IBM, Facebook and even Google! Yet it trades for just under $5. [Get the scoop on the 5G SuperStock right here.]( The Market's Best Early Warning System Drops in January can largely be brushed aside. But there is a key early-year trend to watch closely. The Dow has ended February with a loss 10 times since 1993. [Chart - Dow's Early Warning]( This means that the markets have seen gains 65.5% of the time in the month. For the most part, February is a great month for stocks. All the jitteriness over earnings that we typically see in January is erased, and there's a bounce higher. By and large, it's the month where confidence is born. But here's the deal... When the Dow does decline in February, the move tends to be significant. I'm talking an average drop of 4.9%. Since the majority of fourth quarter earnings are reported in February, the market struggling in the month is a very [good indicator]( that there's something to be concerned about at the corporate level. We can clearly see from the chart that the market drops in February are largely clumped together - occuring in 1999, 2000, 2001 and 2003 and then in 2007, 2008 and 2009. And - no surprise - those drops stretch over two of the largest market declines in history. More importantly, the initial drops in February (in 1999 and 2007) preceded the [bear markets]( by mere months. These were early warnings of the systemic collapses to come. Even in 2018, the big drop in the Dow during the month was an early warning of the carnage that would unfold months later as the [U.S.-China trade war]( came to a head. That year, the Dow soared 5.4% in January but pulled back sharply in February. That sell-off continued into March and then picked up steam in October and ended with a historic collapse in December. So investors should expect the markets to rebound from January's annual sell-off in February. BUT... if the markets do struggle in February - which happens only 34% of the time - investors must sit up and take notice. This is especially true if the sell-off in January bleeds into the shortest month of the year. That means a bear is lurking about. And it means the pullback could be historic. Here's to high returns, Matthew P.S. January was a rocky month for stocks, as I warned it would be. But is this the buy signal that investors have been waiting for? [Find out here.]( [Leave a Comment]( RECOMMENDED LINKS [These 3 Cryptos Could All Be Bigger Than Bitcoin]( [See How the Win-Both-Ways Trade Could Make You Up to 350% Overnight (Like It Did for Rick!)]( MORE FROM PROFIT TRENDS [Chart Pattern You Need To Know Hero Image]( [The One Chart Pattern That Every Investor Should Know About]( [5G Networks Hero Image]( [After All the Hype, 5G Is Finally Here]( [Bitcoin Crash Hero Image]( [The Bitcoin Crash Is Here... 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