Be on guard in coming days for soothsayers who base their 2024 predictions on how the market performs in early January. The first trading sessions of a calendar year carry no more predictive ability than those at any other time of the year— which is to say it tells you next to nothing. Documenting this is tricky, since there are many differences among those who try to read the early-January tea leaves. Some insist that it’s the very first trading day of January that possesses talismanic significance. Others focus on the first two trading days or the first five trading days. Still others — followers of the so-called January Effect — focus on the entire month.
Regardless, as you can see from the table below, none of these versions has an impressive track record. In each case, you’d have a better success rate if you simply predicted that the stock market will rise each year.
Prediction
% of time correct (based on DJIA since 1897)
First trading day of January predicts market’s direction rest of the year
61.9%
First two trading …
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Regardless, as you can see from the table below, none of these versions has an impressive track record. In each case, you’d have a better success rate if you simply predicted that the stock market will rise each year.
Prediction
% of time correct (based on DJIA since 1897)
First trading day of January predicts market’s direction rest of the year
61.9%
First two trading …nnDiscussion:nn” ai_name=”RocketNews AI: ” start_sentence=”Can I tell you more about this article?” text_input_placeholder=”Type ‘Yes'”]