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January Barometer

The January Barometer has been fairly accurate since 1950. A tremendous history of correlation, and hint as to future direction.

Basically, the J.B. has 2 parts. First 5 days of Trading. The second part 30 days of training (month of jan)

Since 1950 there has been a pattern, that gives you a preview of how the stock market may go for the next year. It is called the January Barometer.

Basic, you look the the S and P 500 (SPX), and see what it does in January. Both the first 5 days of trading and the whole month of trading. And see what that correlates too in the the past.

The first 5 days of trading, give you about an 85% correlation, and 90 percent plus for the entire month.

Therefore, if the SPX goes up in the first 5 days, 85 % chance that will be the direction for the year. If we watch the whole month and it goes sideways, then a 90 percent chance the market will go sideways for the year.

Pretty cool little tool.

And the SPX went. Jan 2 opened 4745. 5 days later closed at 4763. So a bit of an uptrend. I might add, it went down, then up. So a little sideways. Statisitically, up by may be considered sideways. It suggests up trend. But I would confirm by watching, the blance of the month (for higher probability)

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