Chart of the Day

As goes January, so goes the year. This particular phenomenon is what is referred to as the January Barometer. There is also a variation whereby the first five trading days are supposed to be indicative of the stock market's performance for the rest of the year. With the market up after three trading days, today?s chart presents the average performance of the S&P 500 16 (end of January), 58 (end of Q1), 121 (end of Q2), and 247 (end of the year) trading days following a first five trading days gain (blue bars) and a first five trading days loss (gray bars). The chart illustrates that the S&P 500 has tended to end the year with a larger gain (on average) following a gain during the first five trading days. In fact, following a gain during the first five trading days in January; the S&P 500 finished the year up 77% of the time.