The media confuses the various seasonal trading patterns that occur in January, but the January Barometer states that “As goes January, so goes the year.” This adage is about to be tested again this year.
The January Barometer had a long, successful track record for many years (using the $SPX index as “the market”). According to the Stock Trader’s Almanac (www.stocktradersalmanac.com), the Barometer – which was devised by Yale Hirsch in 1972 – has had only 8 “significant” errors in 66 years. The Catch 22 here might be the word “significant.”
From my point of view, it has failed for the last three years...
Read the full feature article (published 11/6/17) by subscribing to The Option Strategist Newsletter.