The way I learned it was "As goes January, so goes the rest of the year". Mirite? @AlmanacTrader pic.twitter.com/NPNhe5z6t2
— J.C. Parets (@allstarcharts) January 29, 2021
Today’s Chart of the Day was shared on Twitter by JC Parets (@allstarcharts). January is officially in the books! Unfortunately for the bulls, both the S&P 500 and Dow closed negative on the month by 1.22% and 2.10%, respectively. The January Barometer that JC brings up is a seasonality indicator popularized by Yale Hirsch of the Stock Traders Almanac in 1972. The indicator is pretty straight forward. It states that as the S&P 500 goes in January, so goes the rest of the year. This may seem too simplistic, but it has an impressive track record. Since 1950, there have only been 11 errors, giving the January Barometer an 84% accuracy ratio.