"January Effect" with stock market
 

I heard on CNBC today (12/30) the following commentary by one of the guests interviewed...re: the so-called January Effect:

1) The first 5 trading days of January has an 85% probability of predicting the gain vs. loss yearly status for the market.

2) For action the entire month of January, it sets a 76% yearly probability.

Disclosure: Notice I didn't say 100% predictability. So don't shoot the messenger.

Gene

:boom:
:boom:
:boom:

a report/forecast like that is akin to forecasting a year in advance how many hurricanes there will be next year.

Patterns can be useful looking backward in time....they are hardly a basis for forecasting and especially the stock market. It is going to go where ever the lead steers determine it is to go based on their gain opportunities at the time.

Makes for interesting reading....sometimes.

Sorry Gene but you're dreaming if you think they won't shoot the messenger on this board. :throwtomatoes:

But I applaud your courage for passing along the info. :BigApplause::BigApplause:

And now that I dipped my toe in, what specifically are they looking for in the 1st 5 trade days to determine? Are they saying the % gain/loss in those first 5 days will be near/same as it will be for the whole year?

Hard for anything to go down with the Fed printing $85,000,000,000 a month

I'm pretty sure this backward looking yearly anecdote is that the market direction will be the same, no correlation to magnitude.

BTW, I've seen 2 or 3 posts/threads about the market just in the past week. The beginning of the end of the bull if this continues.

The January Effect, by definition, could (I repeat...could) affect the market up OR down. So it is not, by inference, a "bullish" post on Dec. 30.

Gene

Where I live the January Effect means "Snow"!

Stats
 

Stats are always fun. Thanks for sharing.

I had always heard of the January Effect, but I had never seen the 85% and 76% probability numbers. Again -- I repeat -- these aren't 100% stats!

The first 5 "stock market" days of January conclude Jan. 8, 2014. Mark your calendar for this tracker. And then Jan. 31.

I'm not sure how this duo works, say, if the market has a Jan. 2-8 gain, but a loss for Jan. 2-31 (or vice versa). I would think the latter period would have more weight (since it spans a longer period). We'll see!

Gene

I thought the stats were fun..................stats:

Statistics is the study of the collection, organization, analysis, interpretation and presentation of data. Statistics is alternately described as a mathematical body of science that pertains to the collection, analysis, interpretation or explanation, and presentation of data,[5] or as a branch of mathematics[6] concerned with collecting and interpreting data. Because of its empirical roots and its focus on applications, statistics is typically considered a distinct mathematical science rather than as a branch of mathematics.[7][8] Some tasks a statistician may involve are less mathematical; for example, ensuring that data collection is undertaken in a way that produces valid conclusions, coding data, or reporting results in ways comprehensible to those who must use them.

I have always been a little suspicious that financial experts collude in order to manipulate their markets. For me I am always in an index frame of mind; albeit I do believe in rebalancing my portfolio annually

The market did well primarily because of the Fed which did nothing for main street nor retirees looking for fixed income vehicles.

I am taking the January Effect with a grain of salt (maybe a couple of grains).

The only thing I'm predicting for 2014 is the following:
"The Dow 30, S&P 500 and Nasdaq will all end the year either ahead or behind 2013."

Gene
...enjoying the Villages!

Haven't you heard its only $75 Billion now LOL. Keynesians are all in.

Goodbye
 

It's going to crash. Sell!!!

:cryin2::cryin2::cryin2: