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Sunday, January 31, 2016 8:42:20 AM
* Saturday, January 30, 2016
The major averages finished with a negative return in January. Once of the old sayings on Wall street is the way January goes the Year goes. The chart below shows all of those years since 1900 in which the Dow had a negative return in January and how the year ended performance wise. Overall the odds of both a Negative January Return and Negative Yearly Return is 62% (26 out of 42). The correlation worked in 2015 but didn't in 2014, 2010 and 2009.
Year Jan Yearly Year Jan Yearly Year Jan Yearly
Return Return Return Return Return Return
1/31/1901 -5.5 -8.7 Y 1/31/1940 -3.3 -12.7 Y 1/29/1982 -0.4 19.6 N
1/31/1907 -2.8 -37.7 Y 1/31/1941 -5.3 -15.3 Y 1/31/1984 -3.0 -3.7 Y
1/29/1909 -1.8 15.0 N 1/30/1942 -1.7 7.6 N 1/31/1990 -5.9 -4.3 Y
1/31/1910 -7.2 -17.8 Y 1/30/1948 -3.4 -2.2 Y 1/31/2000 -4.8 -6.2 Y
1/31/1912 -1.7 7.7 N 1/30/1953 -0.7 -3.8 Y 1/31/2002 -1.0 -16.8 Y
1/31/1913 -4.7 -10.3 Y 1/31/1956 -3.6 2.3 N 1/31/2003 -3.5 25.3 N
1/31/1916 -8.6 -4.2 Y 1/31/1957 -4.1 -12.8 Y 1/31/2005 -2.7 -0.6 Y
1/31/1919 -1.9 30.5 N 1/29/1960 -8.4 -9.3 Y 1/31/2008 -4.6 -33.8 Y
1/30/1920 -2.8 -32.9 Y 1/31/1962 -4.3 -10.8 Y 1/30/2009 -8.8 18.8 N
1/31/1923 -0.8 -2.7 Y 1/31/1968 -5.5 4.3 N 1/29/2010 -3.5 11.0 N
1/31/1927 -0.5 27.7 N 1/30/1970 -7.0 4.8 N 1/31/2014 -5.3 7.5 N
1/31/1928 -1.1 49.5 N 1/31/1973 -2.1 -16.6 Y 1/30/2015 -3.7 -2.2 Y
1/29/1932 -2.2 -23.1 Y 1/31/1977 -5.0 -17.3 Y 1/29/2016 -5.5 ?
1/31/1935 -2.2 38.6 N 1/31/1978 -7.4 -3.2 Y
1/31/1939 -7.1 -3.0 Y 1/30/1981 -1.7 -9.2 Y
As for the market the 5 Day Average of the Put to Call Ratio dropped quite a bit this week as the market rallied. I still have concerns that the 5 Day Average of the Put to Call Ratio never rose above the 1.25 level. As I mentioned before corrections of 10% or more in the S&P 500 have all been accompanied by a rise above the 1.25 level in the Put to Call Ratio (points A) before significant bottoms have occurred.
Finally the pattern evolving from early November looks similar to what occurred last Summer into early Fall. Notice back then there was a sharp sell off followed by a decent "abc" bounce which stalled out along the bottom of its downward channel. This was then followed by another sharp drop (points c to d). Currently we could be seeing the same type of pattern so it will be interesting to see what transpires the next few weeks.
http://www.amateur-investors.com/AII_Weekend_AnalysisJan_30_16.htm
• George.
Click on "In reply to", for Authors past commentaries.
Information posted to this board is not meant to suggest any specific action, but to point out the technical signs that can help our readers make their own specific decisions. Your Due Dilegence is a must!
• gtsourdinis
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