If history is any judge, 2011 will be an up year for stocks. It's been a great start: the Dow is up 2.7 percent in January, and 2.5 percent in February.
My producer Robert Hum has pointed out that, going back to 1940, there has been 26 times the Dow has been up those two months. The Dow was up for the full year in 25 of the 26 instances. The only year it didn't work: 1974, an infamous year.
Same for the S&P 500. Stock analyst firm Bespoke notes that since 1928 the S&P 500 has finished both January and February higher in 30 out of 83 years. The index traded higher 26 out of those 30 times, for an average gain of 7.40 percent.
What matters now? For the short term: oil stabilization. For the intermediate term: QE2 (the Fed's quantitative easing program). That's the obvious takeaway from the trading action in the past couple days.
Why? Once again stocks stabilized pre-open as oil came down. Then, in the 7am ET hour, during an interview with Steve Lieseman, St. Louis Fed President Bullard said it was unlikely there would be an early end to QE2, and also noted that the economic impact from higher oil would likely be muted. Futures rose further.
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