“With yesterday’s 150-point drop in the Dow Jones industrial average and the nearly 12-point decline in the Standard & Poor’s 500, the indices are now down 5.3 percent and 3.6 percent, respectively, for the month of January. …
“The barometer is simple — the stock market usually goes up for the year if the S&P index is higher in January. And, you guessed it, the market usually suffers losses when January is a bust. …
“According to the Stock Trader’s Almanac, the January Barometer has been accurate 88.7 percent of the time since Yale Hirsch, the Almanac’s wise founder, spotted this trend in 1972.
“Just this past week the Fed reduced bond and mortgage purchases under QE by another $10 billion a month. And while $65 billion monthly is still going toward that effort, Wall Street is peeved that the Fed is no longer being as nice as it had been.
“Let me finish with something Bob Dylan almost sang: ‘You don’t need a weather man to know which way the barometric pressure is going on Wall Street.’”
— Excerpt contributed by Jason Kelly
Z-val definition and more forecasts in The Z-val Zone.
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