"As goes January, so goes the year" is a common adage on the street. If that is the case, we are in for a tough rest of the year for the markets. As of this afternoon's trading, the Dow (Dow: .DJIA), S&P (Chicago: .SPX) and Nasdaq (NASDAQ: COMP)were down 8.0%, 7.5% and 5.2% for the month respectively.
Historically, January has been one of the best months of the year for the Dow, S&P and Nasdaq and the likelihood of having an up year is consistent with the likelihood of having an up January. In fact, each of the major indices moves in the same direction that January moved over 70% of the time. Here are the details.
Dow (Since 1897):
S&P 500 (Since 1929):
NASDAQ (Since 1972):
All is not lost. The last time the year moved in the opposite direction of January was 2005, when January closed to the downside but the year finished with a modest gain. 2003 was even better; January closed down for all three indices but the year posted gains over 25%.
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