NASDAQ 100 is on track for more gains as it enters bullish market territory

Only two trading sessions are left from the first quarter, and the stock market is on track to make more gains. NASDAQ 100, in particular, is on a mission after it jumped more than 20% from its December lows.

According to the textbook definition, whenever the market does that, it officially leaves the bear market and enters bull market territory. So why should we expect more gains?

Statistics help.

History tells us that more gains come on average when the S&P 500 performance when the Q1 low is higher than the December low. More precisely, the full-year return was 18.6% on average.

NASDAQ 100 makes a new high for the year

The bearish price action from last year was quickly replaced with a strong rally. Quite remarkable if we consider that the Federal Reserve tightened financial conditions in 2023, and yet the stock market rallied.

At this point, the market has made a new high for the year. However, the previous series of lower highs and lower lows remains in place. It means that only a move above the pivotal area seen at 13,750 points would completely invalidate the previously bearish market.

To sum up, it may seem irrational that the stock market would rally under such conditions. Yet, here we are, and bias remains bullish, with more gains expected in the quarters ahead.