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01/11/2008

The January Barometer

An old saying is that as January goes, so goes the year. And
according to the Stock Trader’s Almanac, since 1950 the January
indicator has only five major errors for a 91.2% accuracy ratio.
“Vietnam affected 1966 and 1968; 1982 saw the start of a major
bull market in August; 9/11 affected performance in 2001; and
the anticipation of military action in Iraq held down the market in
January 2003.”

If you include the ten flat years, which the Almanac defines as
less than +/- 5% for the S&P for the entire year (not including
dividends), the barometer’s accuracy ratio is 75%; the more
common measurement.

So I thought we’d just look at the past eight years, specifically,
including two of the major mistakes (’01, ’03); while throwing in
gold and oil just for the heck of it.

S&P 500 Return for the year* ...Gold ..Oil

12/31/99 1469 ..$289 $25.20
1/31/00 ..1394 -5.1%.......-9.1

12/31/00 1320 272 .26.80
1/31/01 ..1366 +3.5%......-11.9

12/31/01 1148 279 .19.84
1/31/02 ..1130 -1.6 ..-22.1

12/31/02 .879 .347 ..31.20
1/31/03 ...855 .-2.7 ..+28.7

12/31/03 1111 416 ..32.52
1/31/04 ..1131 +1.7 .+10.9

12/31/04 1211 438 ..43.45
1/31/05 ..1181 -2.5 ..+4.9

12/31/05 1248 519 ..61.04
1/31/06 ..1280 +2.5 ..+15.8

12/31/06 1418 638 ..61.05
1/31/07 ..1438 +1.4 ..+5.5

12/31/07 1468 838 ..95.98

*For the yearly return, I include dividends. Stock Trader’s
Almanac does not. But I’m still including 2007 as a ‘flat’ year,
based on their methodology; the S&P being up 3.5% before
dividends.

The January barometer is but another tool, albeit an important
one particularly when the geopolitical scene is sanguine.
However, we have a far from sanguine environment today, I
would argue.

Sources: “2007 Stock Trader’s Almanac,” Yale Hirsch & Jeffrey
A. Hirsch and my own archives for the gold and oil data.

Wall Street History returns next week.

Brian Trumbore



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-01/11/2008-      
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Wall Street History

01/11/2008

The January Barometer

An old saying is that as January goes, so goes the year. And
according to the Stock Trader’s Almanac, since 1950 the January
indicator has only five major errors for a 91.2% accuracy ratio.
“Vietnam affected 1966 and 1968; 1982 saw the start of a major
bull market in August; 9/11 affected performance in 2001; and
the anticipation of military action in Iraq held down the market in
January 2003.”

If you include the ten flat years, which the Almanac defines as
less than +/- 5% for the S&P for the entire year (not including
dividends), the barometer’s accuracy ratio is 75%; the more
common measurement.

So I thought we’d just look at the past eight years, specifically,
including two of the major mistakes (’01, ’03); while throwing in
gold and oil just for the heck of it.

S&P 500 Return for the year* ...Gold ..Oil

12/31/99 1469 ..$289 $25.20
1/31/00 ..1394 -5.1%.......-9.1

12/31/00 1320 272 .26.80
1/31/01 ..1366 +3.5%......-11.9

12/31/01 1148 279 .19.84
1/31/02 ..1130 -1.6 ..-22.1

12/31/02 .879 .347 ..31.20
1/31/03 ...855 .-2.7 ..+28.7

12/31/03 1111 416 ..32.52
1/31/04 ..1131 +1.7 .+10.9

12/31/04 1211 438 ..43.45
1/31/05 ..1181 -2.5 ..+4.9

12/31/05 1248 519 ..61.04
1/31/06 ..1280 +2.5 ..+15.8

12/31/06 1418 638 ..61.05
1/31/07 ..1438 +1.4 ..+5.5

12/31/07 1468 838 ..95.98

*For the yearly return, I include dividends. Stock Trader’s
Almanac does not. But I’m still including 2007 as a ‘flat’ year,
based on their methodology; the S&P being up 3.5% before
dividends.

The January barometer is but another tool, albeit an important
one particularly when the geopolitical scene is sanguine.
However, we have a far from sanguine environment today, I
would argue.

Sources: “2007 Stock Trader’s Almanac,” Yale Hirsch & Jeffrey
A. Hirsch and my own archives for the gold and oil data.

Wall Street History returns next week.

Brian Trumbore