|
|
Wall Street History
https://www.gofundme.com/s3h2w8
|
01/05/2007
The January Barometer
An old saying is that as January goes, so goes the year. And according to the Stock Trader’s Almanac, since 1950 the January indicator has only five major errors for a 91.2% accuracy ratio. “Vietnam affected 1966 and 1968; 1982 saw the start of a major bull market in August; 9/11 affected performance in 2001; and the anticipation of military action in Iraq held down the market in January 2003.”
If you include the nine flat years, which the Almanac defines as less than +/- 5% for the S&P for the entire year (not including dividends), the barometer’s accuracy ratio is 75%; the more common measurement.
So I thought we’d just look at the past seven years, specifically, including two of the major mistakes (’01, ’03); while throwing in gold and oil just for the heck of it.
S&P 500 Return for the year* ..Gold .Oil
12/31/99 1469 ..$289 $25.20 1/31/00 ..1394 -5.1%.......-9.1
12/31/00 1320 272 .26.80 1/31/01 ..1366 +3.5%......-11.9
12/31/01 1148 279 .19.84 1/31/02 ..1130 -1.6 ..-22.1
12/31/02 .879 .347 ..31.20 1/31/03 ...855 .-2.7 ..+28.7
12/31/03 1111 416 ..32.52 1/31/04 ..1131 +1.7 .+10.9
12/31/04 1211 438 ..43.45 1/31/05 ..1181 -2.5 ..+4.9
12/31/05 1248 519 ..61.04 1/31/06 ..1280 +2.5 ..+15.8
12/31/06 1418 638 ..61.05
*For the yearly return, I include dividends. Stock Trader’s Almanac does not.
The January barometer is but another tool, albeit an important one particularly when the geopolitical scene is sanguine. However, we have a far from sanguine environment today, I would argue.
Sources: “2006 Stock Trader’s Almanac,” Yale Hirsch & Jeffrey A. Hirsch and my own archives for the gold and oil data.
Wall Street History returns next week.
Brian Trumbore
|
|
|