Tom Lee's First Five Days Rule Predicts Market Direction
Written by Ohris M. Greyoon, Blockchain & Crypto Expert
- Market Performance Pattern: Since 1950, years with positive performance in the first five trading days saw an 84% market rise, with average full-year returns near 16%, indicating strong investor demand and reflecting market health.
- Negative Performance Impact: In the 27 years with negative early performance, average returns dropped to about 3% and win rates fell to 56%, demonstrating that early market performance significantly influences annual returns, as lack of investor confidence hampers sustained rallies.
- Psychological Structure Consistency: Tom Lee notes that early market performance is not coincidental but reflects investor risk appetite, where early buying signals willingness to deploy capital, and without demand, upward trends are hard to maintain.
- Crypto Market Similarity: Lee emphasizes that crypto markets follow the same psychological structure, where early capital flows indicate the activity level of large participants; strong starts suggest renewed confidence, while weak starts reflect caution, underscoring the importance of early January trading.
About the author
Ohris M. Greyoon
Ohris M. Greyoon holds a Master’s in Computer Science from MIT and has 10 years of experience in blockchain technology and cryptocurrency markets. A pioneer in decentralized finance (DeFi) analysis, he leads Intellectia’s Crypto News, offering cutting-edge insights into digital assets.
