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The Dow Jones Industrial Average rose for the tenth consecutive day on Thursday, posting its longest winning streak since November 1996. The index is now up about 11 percent so far this year.
Will the Dow continue on its upward trend or will the Ides of March stifle the rally?
Ides of March is a date in the Roman calendar that corresponds to March 15, which became notorious as the day when Julius Caesar was assassinated in 44 B.C. It also coincides with a time of year when an abundance of portfolio maneuvers take place ahead of the end of the quarter.
Since 1950, there have been only twelve other instances when the Dow was up more than 8 percent going into mid-March. In ten of those years, the index continued to build momentum one, two and three-months out without any significant pullbacks.
(Read more: Dow's Best 1st Quarter Since 1998?)
During bull markets, defined by a prolonged period in which stock prices increase at a faster pace than their historical averages, the Dow realized gains of over 4 percent three-months later, according to Morningstar Data.
The following table displays the Dow Jones percentage change in the months following the Ides of March when the index was up more than 8 percent.
The Dow is up 10 percent so far this quarter, on track for its best Q1 since 1998. What's previously happened after a strong first quarter?
Since 1950, there have been only twelve other instances when the DJIA was up more than 8 percent in the first quarter (11 of the last 12 times took place prior to the year 2000).
Historically, a strong first quarter correlates with strong gains for the year. There are bumps along the way, but most of the time, the Dow manages to post double-digit gains for the full year.
In ten of the last twelve times it occurred, for example, the Dow finished the year with a gain of more than 15 percent when the first quarter was up more than 8 percent.
The Dow Jones Industrial Average is on track to close positive for the 10th consecutive Friday. Will the winning streak continue?
So far this year, the Dow industrial average rose 600 points in the last 10 Fridays. That accounts for about half of this year's point gains — the index is up 1,274 points.
The unusual streak is the longest since the first half of 2007, when the Dow industrials rose for 12 consecutive Fridays. If the market closes higher today, it will be tied for the third longest ever.
Within the Dow, seven out of thirty stocks are responsible for adding more than 50 percent of this year's point gains: International Business Machines, 3M, McDonald's, United Technologies, Chevron, Travelers, and Home Depot.
Gold stocks fell to a three-and-a-half year low on Monday, as investors continue to reduce their exposure to bullion and other commodities on weakening economic data from China.
With stocks rising, the dollar strengthening, and U.S. Treasury bond yields holding below 2 percent, investment demand for gold continues to decline. According to BlackRock, gold exchange-traded product outflows have now reached $5.6 billion year-to-date.
Gold futures prices closed down last month for the fifth consecutive time, losing 11 percent and posting their longest losing streak since January 1997.
Meanwhile, the CBOE Gold Index, which is an equal-dollar weighted index composed of 12 companies involved primarily in gold mining and production, is down 25 percent in 2013.
The Dow Jones Transportation Average is on a tear, hitting a new all-time high on Thursday. So far this year, transports are leading the gains, up 13 percent compared to a 7 percent increase for the Dow Jones Industrial Average.
Should investors take any clues from this trend? According to the Dow Theory, when both indexes move in tandem and trade around the new highs, it signals strength and confirms a bullish pattern.
The last time the Dow transports outperformed the Dow Industrials in the first two months of the year was back in 2006. In that year, transports rose 16.3 percent, while the industrials rose 8.7 percent.
Historically, transports posted an average increase of 21 percent when the index outperformed industrials in the first two months of the year (Industrials were up 15 percent, on average).
According to Morningstar Commodity Data, that pattern has been consistently observed in the market over 90 percent of the time since 1932.
In fact, there were only three instances in history when the Dow Industrial average had a negative year given a strong performance by the Dow transport average in the first two months of the year.
Retail gasoline prices are up for the tenth consecutive week, reaching their highest level since October. Who's winning here?
The average retail gasoline price in the US is currently $3.812 per gallon, according to the Energy Information Administration (EIA) -- the first time that gas prices have been that high this early in the year.
Demand for corporate high-yield debt is rolling over while stocks continue to rise, a divergence that may signal a fading appetite for risk.
So far in 2013, the divergence is even more pronounced, with the HYG recently turning negative while the SPY remains up about 6 percent.
Investors often track high-yield bonds in an effort to gauge risk appetite and predict any potential turns in market sentiment.
Thus, could the recent divergence between high-yield corporate bonds and equities signal cautiousness ahead?
The 30-day rolling correlation between the HYG and SPY recently crossed below -0.25, the lowest level since August 2008. There has been only five other instances that this happened since 2007. And in four of those times, the SPY was down within a month.
In August 2008, for example, after the correlation recorded -0.28 for the first time in a year, the SPY sold-off nearly 7 percent within a month. During another instance in July 2007, the SPY fell more than 3 percent after the correlation recorded less than -0.25.
The market's recent run has investors on the hunt for where to put their money. So where are the biggest bets being placed in 2013?
According to data by IndexUniverse, an independent data provider covering the ETF industry, investors seem to be avoiding lower-yielding securities and, instead, piling into more international funds.
WisdomTree Japan Hedged Equity, for example, received net flows of over a $1 billion in January. The fund's strategy provides exposure to equities in Japan, while hedging against fluctuations between the value of the U.S. dollar and the Japanese yen.
Emerging markets funds, which were hot in 2012, continue to show strength this year on the heels of economic improvements in the U.S. and abroad.
The largest outflows appear to be centered around some of the ETFs tracking U.S. equities, U.S. fixed income and gold.
The ETF business is booming -- assets under management jumped 25 percent last month to a record $1.4 trillion. In fact, it's one of the few areas in the financial services business that is growing robustly.
ETFs track indexes and provide broad diversification, similar to mutual funds, though inherent differences exist between the two products. The ETF space represents only one-tenth of the mutual fund industry, but ETFs' traction is growing as retail investors embrace them as a fast, efficient and economical way to trade.
So far in 2013, fund flows for international equity, U.S. equity and international fixed income are leading the charts.
Stock ETFs, in particular, have gained momentum, attracting $29 billion in assets in January, on top of $121 billion last year. At this rate, stock ETFs are on track to nearly triple last year's inflows.
Both stock ETFs and mutual funds saw four-consecutive weeks of inflows in January, according to ICI. However, stock mutual funds shed more than $152 billion in assets last year.
U.S. stocks posted strong gains in January, as the Dow Jones Industrial Average continueU.S. stocks posted strong gains in January, as the S&P 500 continued to trade near an all-time high.
The S&P 500 gained 5 percent in the first month of 2013, logging its best January performance since 1997. Similarly, the Dow surged nearly a thousand points or 5.77 percent, its largest increase since 1994.
With the markets on a roll, will January signal the market's direction this year? Since 1950, the "January Barometer" predicted the direction for the year with 81 percent accuracy.
The correlation is even stronger when the market finishes January in the black, proceeding with full-year gains 90 percent of the time.
Consider the last five decades, for example, when there were 11 other instances that the S&P 500 rose at least 5 percent.
In all of those years, with the exception of 1987, the index recorded double-digit gains of at least 16 percent.
Even in 1987, when stock markets around the world crashed during "Black Monday", the S&P 500 managed to finish the year positive, up 2 percent.
While past performance does not guarantee future results, investors often look at history as a point of reference.
Below is a look at the full-year gains when the S&P 500 was up more than 5 percent in January dating back to 1950.