The January Barometer is a fairly famous study from the Stock Traders Almanac. It says that “as goes January, so goes the year”. In other words, a positive January will typically lead to a positive year, while a negative January can be a warning. Let’s look at how the SPX has done for the remaining 11 months of the year based on how January performed.

The numbers show that in years that January has done well, the rest of the year has typically fared well also. Below is a profit curve.

That is a nicely steady upslope. Now let’s look at how Feb-Dec has done after a down January.

Not as many instances, but there does not appear to be the same kind of bullish tendency here. More of a crapshoot. Below is a curve.

Certainly not a chart to trade off of. So it would have been nice if January finished positive. But it is not a sign of impending doom. Just that we don’t have the kind of momentum that would be preferable.

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Friday is the last trading day of January. The first day of the month is well known for having a seasonal bullish tendency. Interestingly, I have noted this tendency has not been prevalent over the last few years. This can be seen in the equity curve below.

As you can see, 1st day of month profits peaked 4 years ago. Leading up to that, the 1st day of the month had spent years as bullish. It is curious to see that this edge has not persisted during such a strong bull market, and it will be interesting to see if it re-asserts itself going forward.

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Over several time horizons op-ex week in December has been the most bullish week of the year for the SPX. The positive seasonality actually has persisted for up to 3 weeks. I’ve shown the study below in the blog every year since 2008. It looks back to 1984, which was the first year that SPX options traded. The table is updated to include 2013 stats.

The stats here remain extremely strong. Have a wonderful (and bullish?) December Opex Week!

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Historically Thanksgiving week has shown some very strong tendencies. The table below is one I have shown a few times over the years. I decided to update it again this year.

Monday and Tuesday don’t show anything suggesting an edge. Monday’s total return was actually negative until 2008 when it posted a gain of over 6%. Wednesday and Friday, on the other hand, appear to be strongly bullish. And the Monday after Thanksgiving appears to exhibit a bearish edge.

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