January and the Rest of the Year


January 9, 2009

 

Today’s losses combined with Wednesday’s left prices below last week’s close.  Moreover, values eroded substantially for the DJIA and the S&P500 in the first six trading days of 2009. The DJIA is down  -1.9 percent and the S&P500 lost  -1.4 percent, while the NASDAQ fell just  -.3 percent.

 

With all three indices down for the year so far, consider the relationship between changes in January and the anticipated changes for the balance of the year.  Even if some pattern can be detected, in general, the comparison fails as a reliable forecaster.  The diagram below plots the percentage change for the S&P500 in January, against the change for the balance of that year for the period 1950 to 2008…

 

For the 58-year period, these measures changed in the same direction only 35 times.  In the other years, the yearly change and the January change moved in opposite directions.  Thus, the on-going decline in the current market fails to be a significant portend of what may occur to prices in 2009.

 

sp-jan-year.JPG

 

 

DJIA                 -1.64  percent

NASDAQ         -2.81  percent

S&P500            -2.13  percent

This entry was posted on Friday, January 9th, 2009 at 12 042009000000Fri, 09 Jan 2009 16:52:41 +0000 and is filed under Market Report. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.

Leave a Reply

You must be logged in to post a comment.