I hope everyone had a wonderful holiday…
Not really much of a hangover, historically speaking. January results, going back to 1960, average a little better than 1.0%.
These results were generated using a buy on the open of the first trading day of January and a sell at the close of the next day (or any number of days thereafter). The first day is day zero, not day 1. Therefore, day 1 actually contains 2 days worth of market activity.
Profit Distribution:
Since January 1960, (51 January trades), 58.82% of the time the S&P 500 has closed the month with gains.
Best January: 13.18% in 1987.
Worst January: -8.54% in 2009.
so we don’t need to expect a january of death… I would think if we had a booming january we’d be setting up for a scary correction at some point fairly soon after…
Can you run this same test, but only calculate January returns after December was up 5% or more?
Hi Chris, if I get some time I will run that test. I had the same idea. I’ve been traveling for a week and am backed up with things to do right now.
I might try to code it too. Didn’t want to step on your toes. If I have time, I might to to figure out Luke’s code too. It’d be a good exercise.
Hollywood,
I’m trying to test the adage that says the market follows January results. Since there is a good chance of January being negative, I want to see what the chances are that the year will end negative.
So, buy Feb 1st and close at year end if January ends positive or short Feb 1st if January is negative
I’m using the AFL code wizard but can’t find the code
any help?
Thanks
Luke, the code should not be very difficult. I’ll try and take some time and code it for you. I can’t promise anything as I am behind on a few things that must get done soon.