The 10% jump (and 10.6% total return) for the S&P 500 (SPY) in Q1 was off-the-charts, literally, as the close of 1569 was an all-time closing high. This marks the fourth consecutive year of a strong start to the year, a topic I raised in January when I discussed the new seasonal tradeand predicted the rally would persist. Of course, this Q1 wasn't as good as the first quarter of 2012, which saw a 12.6% total return, but it was one of the best quarters since the rally began in 2009, which had two very strong quarters in the middle of the year as the rally began, with a 14.6% gain in Q2 and a 15.6% advance in Q3. More recently, Q4-2011 saw an 11.8% return, and Q4-2010 saw a 10.8% return on the back of an 11.3% return in Q3-10.
With the market up a lot and at all time highs, nervous nellies are coming out of the woodwork, proclaiming that this must not be a good time to own stocks. While I am in the camp of those who believe a small pullback could take place soon, I think that this bull market has legs, is healthy and has much further to go. I began the year with a 1664 year-end forecast, and, after capturing 60% of the expected gains in just one quarter, I think the market could end up exceeding my target. With that said, though, I don't think that every quarter will rise 10% or more! With such a big debate developing over whether or not setting an all-time high is a warning sign of imminent danger for stock investors, I thought it might be useful to take a look at the market from several different perspectives.
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