About The January Indicator
Sat, Feb 6, 2016
The stock market direction in the month of January can forecast market direction for the rest of the year. It's called The January Indicator or January Barometer. Does January have special forecasting ability? The stats for the January Indicator seem strong.
The S&P 500 index ended January with a 5.1% drop. The Dow Jones Industrial Average was down 5.5% while the Nasdaq Composite Index did worse, down 7.9% for the month. What does The January Indicator mean for the rest of 2016?
The Dow Jones industrials was created in the year 1896. Since 1896 a higher January was followed by a positive full year 75% of the time. However, the January Barometer is not as accurate from a bad January when there's a lower probability of 61% indicating the Dow will finish the year in minus territory.
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