Last Five Sessions of January

Building on research recently presented by Wayne Whaley, I was curious to see the market’s performance during the last week of January when the first three weeks posted a solid gain. The table below lists every instance since 1970 when, prior to the final five sessions of January, the S&P was up at least 1% over the previous three weeks…

SPX +1% Over Last Three Weeks Heading into Final Week of January
01/24/11… S&P500 ??? five sessions later
01/24/07… S&P500 -0.1% five sessions later
01/24/06… S&P500 +1.0% five sessions later
01/23/04… S&P500 -0.9% five sessions later
01/24/01… S&P500 +0.1% five sessions later
01/24/97… S&P500 +2.0% five sessions later
01/24/95… S&P500 +1.0% five sessions later
01/24/94… S&P500 +2.0% five sessions later
01/24/91… S&P500 +2.7% five sessions later
01/24/89… S&P500 +3.1% five sessions later
01/23/87… S&P500 +1.5% five sessions later
01/24/85… S&P500 +1.7% five sessions later
01/24/84… S&P500 -1.5% five sessions later (*)
01/24/83… S&P500 +3.8% five sessions later
01/24/80… S&P500 +1.3% five sessions later
01/24/79… S&P500 -0.2% five sessions later
01/23/76… S&P500 +1.7% five sessions later
01/24/75… S&P500 +5.5% five sessions later
01/22/71… S&P500 +1.1% five sessions later

Out of 18 instances since 1970, only one led to a drop of 1%+ in the last five sessions of the month, while thirteen led to a gain of 1%+.

Even if the S&P matches or slightly exceeds its worst performance (1.5% drop) over the next five sessions, the index will still finish the month in positive territory. That bodes well for the year, as an up January has coincided with an up year 90% of the time over the past 30 occurrences since 1961…

S&P500 Rallies in January
2007 – Forecast Up – Correct
2006 – Forecast Up – Correct
2004 – Forecast Up – Correct
2001 – Forecast Up – Incorrect
1999 – Forecast Up – Correct
1998 – Forecast Up – Correct
1997 – Forecast Up – Correct
1996 – Forecast Up – Correct
1995 – Forecast Up – Correct
1994 – Forecast Up – Incorrect
1993 – Forecast Up – Correct
1991 – Forecast Up – Correct
1989 – Forecast Up – Correct
1988 – Forecast Up – Correct
1987 – Forecast Up – Correct
1986 – Forecast Up – Correct
1985 – Forecast Up – Correct
1983 – Forecast Up – Correct
1980 – Forecast Up – Correct
1979 – Forecast Up – Correct
1976 – Forecast Up – Correct
1975 – Forecast Up – Correct
1972 – Forecast Up – Correct
1971 – Forecast Up – Correct
1967 – Forecast Up – Correct
1966 – Forecast Up – Incorrect
1965 – Forecast Up – Correct
1964 – Forecast Up – Correct
1963 – Forecast Up – Correct
1961 – Forecast Up – Correct

Categories : Archived EOD Commentary, End-of-Day Commentary

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