The S&P 500 ended April at a new record high to 4,181.17 from 3,992.25, a gain of 188.97 points for the month.
Not bad, considering a full year plus a month before, the U.S. stock market crash, instigated by Covid-19. Our primary benchmark Index, the S&P 500 gained 83.97% since the March 2020 low. The G-101 algorithm was the first to flash a recovery signal when Wall Street was “claiming more losses, liquidate stocks and convert into cash until the pandemic is better understood.” Not our words, but the Wall Street professionals and the other kind who had diarrhea on the brain. We were buyers and recommended everyone who listened “to jump into the market with both feet and don’t look down.” We broadcasted our G-101 signal with the enthusiasm of a marching band.
Indeed, bragging about prior successes is worthless since previous achievements are like yesterday’s newspapers. Looking from the “eyes of G-101,” the algorithm anticipates higher inflation, rising bond yields, and GOP noise that makes the stock market less than friendly territory. Aside from these worries, the month of April once again proved the accuracy of our G-101 algorithm from the perspective of the S&P 500 index and 127 individual stock suggestions.
The performance of the G-101 demonstrated its value with a strong overall probability rating of 80% for the S&P 500 index, and 78.4% accurate SPM direction of 127 individual stocks: Both the Index and individual stocks, on average for SPM ratings, posted a six-straight quarter of accurate calculations.
Looking ahead to April, the G-101 algorithm is projecting comparable results with volatility remaining the controlling factor. Tangible proof about the economic recovery will remain subjective, a political wildcard since both sides are claiming victory or distortion. We play no politics when it comes to making money in the stock market and claims no winners or losers, except to the bottom line. From the perspective of G-101, enhance value prospects are likely but more selective as new money continues to flood in with blinders on, as the S&P 500 index continues to move higher.
Look to daily G-101 scores for further confirmation as to market direction. Earnings season—the multi-week period when public companies report their quarterly results—gets started mid-month, and market participants want to see momentum carry over from the third quarter of 2020.
Undeniably, the market is being fueled by “hope,” a more dangerous factor than the word implies. Based on the historical accuracy of the G-101, the precedent looks like “hope” means a rigged stock market, like always believing that a $5 gold coin is always under your pillow.