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(1/30/16)
The major averages finished with a negative return in
January. Once of the old sayings on Wall street is the way January goes
the Year goes. The chart below shows all of those years since 1900 in
which the Dow had a negative return in January and how the year ended
performance wise. Overall the odds of both a Negative January Return and
Negative Yearly Return is 62% (26 out of 42). The correlation worked in
2015 but didn't in 2014, 2010 and 2009.
| Year |
Jan |
Yearly |
|
Year |
Jan |
Yearly |
|
Year |
Jan |
Yearly |
|
|
Return |
Return |
|
|
Return |
Return |
|
|
Return |
Return |
|
| 1/31/1901 |
-5.5 |
-8.7 |
Y |
1/31/1940 |
-3.3 |
-12.7 |
Y |
1/29/1982 |
-0.4 |
19.6 |
N |
| 1/31/1907 |
-2.8 |
-37.7 |
Y |
1/31/1941 |
-5.3 |
-15.3 |
Y |
1/31/1984 |
-3.0 |
-3.7 |
Y |
| 1/29/1909 |
-1.8 |
15.0 |
N |
1/30/1942 |
-1.7 |
7.6 |
N |
1/31/1990 |
-5.9 |
-4.3 |
Y |
| 1/31/1910 |
-7.2 |
-17.8 |
Y |
1/30/1948 |
-3.4 |
-2.2 |
Y |
1/31/2000 |
-4.8 |
-6.2 |
Y |
| 1/31/1912 |
-1.7 |
7.7 |
N |
1/30/1953 |
-0.7 |
-3.8 |
Y |
1/31/2002 |
-1.0 |
-16.8 |
Y |
| 1/31/1913 |
-4.7 |
-10.3 |
Y |
1/31/1956 |
-3.6 |
2.3 |
N |
1/31/2003 |
-3.5 |
25.3 |
N |
| 1/31/1916 |
-8.6 |
-4.2 |
Y |
1/31/1957 |
-4.1 |
-12.8 |
Y |
1/31/2005 |
-2.7 |
-0.6 |
Y |
| 1/31/1919 |
-1.9 |
30.5 |
N |
1/29/1960 |
-8.4 |
-9.3 |
Y |
1/31/2008 |
-4.6 |
-33.8 |
Y |
| 1/30/1920 |
-2.8 |
-32.9 |
Y |
1/31/1962 |
-4.3 |
-10.8 |
Y |
1/30/2009 |
-8.8 |
18.8 |
N |
| 1/31/1923 |
-0.8 |
-2.7 |
Y |
1/31/1968 |
-5.5 |
4.3 |
N |
1/29/2010 |
-3.5 |
11.0 |
N |
| 1/31/1927 |
-0.5 |
27.7 |
N |
1/30/1970 |
-7.0 |
4.8 |
N |
1/31/2014 |
-5.3 |
7.5 |
N |
| 1/31/1928 |
-1.1 |
49.5 |
N |
1/31/1973 |
-2.1 |
-16.6 |
Y |
1/30/2015 |
-3.7 |
-2.2 |
Y |
| 1/29/1932 |
-2.2 |
-23.1 |
Y |
1/31/1977 |
-5.0 |
-17.3 |
Y |
1/29/2016 |
-5.5 |
? |
|
| 1/31/1935 |
-2.2 |
38.6 |
N |
1/31/1978 |
-7.4 |
-3.2 |
Y |
|
|
|
|
| 1/31/1939 |
-7.1 |
-3.0 |
Y |
1/30/1981 |
-1.7 |
-9.2 |
Y |
|
|
|
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As for the market the 5 Day Average of the Put to Call Ratio
dropped quite a bit this week as the market rallied. I still have concerns
that the 5 Day Average of the Put to Call Ratio never rose above the 1.25
level. As I mentioned before corrections of 10% or more in the S&P 500
have all been accompanied by a rise above the 1.25 level in the Put to Call
Ratio (points A) before significant bottoms have occurred.
Finally the pattern evolving from early November looks similar
to what occurred last Summer into early Fall. Notice back then there was a
sharp sell off followed by a decent "abc" bounce which stalled out
along the bottom of its downward channel. This was then followed by
another sharp drop (points c to d). Currently we could be seeing the same
type of pattern so it will be interesting to see what transpires the next few
weeks.
Amateur Investors
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