January Barometer for NASDAQ? Not Necessarily

The January Barometer was discovered by Yale Hirsch, author of the The Stock Trader's Almanac which states that as January goes, so goes the rest of the year. This is supposed to be accurate over 90% of the time since 1950, based on the Standard & Poors 500 Index.

However, if you look at the trend for the NASDAQ since 1972, it is only accurate 60% of the time. Out of 35 years, 14 of the years had up January's and up markets; six of the years had down January's and down years. The other 15 years were mixed. The dot com years really threw off the trend. In 1999, January was down 8.7% with the return for the year ending up 57.2%. For the year 2000, January: up 19.2%, year: down 29.6%.