Independent research firm Bespoke Investment has uncovered an earnings trend that hasn't happened since the bull market started.
According to its co-founder Paul Hickey, companies are seeing their strongest stock price performances on the days they're reporting earnings in a decade.
"The average return of companies reporting earnings so far this earnings season has been a gain of 1.1 percent," Hickey said Monday on CNBC's "Trading Nation." "We haven't seen that strong of a pace of performance since the Q1 2009 and Q2 2009 reporting periods."
The trend reflects S&P 500 companies that have already released fourth-quarter results. Roughly half have reported so far.
"We're seeing investors come in, bid up stocks at the open and that strength follows throughout the trading day," Hickey said. "There's really been a rush into these names as they've been reporting."
However, Hickey notes the robust move higher isn't because earnings are stellar. Rather, it's due to pessimism.
Earnings results relative to expectations haven't been as good in recent quarters. Yet, he points out the market is embracing them with "a big kiss."
"Coming into earnings season, we were noting how analysts' negative revisions were at the worst rate to the downside since 2015-2016. So, it set the bar really low," he said. "The market sentiment was so washed out, and we're just seeing stocks rally."
Since fourth-quarter earnings season kicked off Jan. 15, the S&P 500 is up more than 5 percent. Hickey suggests the bullish trend could be sustainable into spring.
"We're seeing more companies lowering guidance than raising guidance. I think that's just because there are a lot of big unknowns out there regarding China and to a lesser extent the federal government," Hickey said. "If neither of those things do go wrong, then you have a low bar going into next earnings season, which could be good."
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