January Barometer - Full Month

This article is about the second of the "January barometers". This uses the full month of January's market returns to help you decide whether to buy or sell into the rest of the year.

The market returns of the full month of January predicts the market returns for the full year with an accuracy of approximately 75%.

If you like going with historical numbers, then start with the "First Five Days" barometer. If the first five days of January are down, then you have this to watch as a backup.

January Barometer - First Five Days

There are three "January barometers" for whether you should buy or sell into the rest of the year which use January as the gauge. I will cover the first in this article.

The first five days of the trading year have shown with approximately 85% accuracy when you should buy into the market. When the first five trading days of the year are up, the market it is up 85% of the time for that full year. When the market is down in the first five trading days the market is down approximately 50% of the time.

The first five trading days of 2006 start today, January 3rd, and end at the market close on January 9th.