BarroMetrics Views: Xmas Indicator for 2012
Many years ago I read an article about the ‘Santa Claus Rally’ and ‘The January Barometer’. Since reading the article, I have incorporated both into my trading plan.
The Santa Claus Rally takes in the last five days of a year and the first two days in January. If a rally does not occur, I look for either a bear market or a sideways market to come about.
The January Barometer says that ‘January goes, so does the year’. Every down down January was followed in the following January by:
- a new or continuing bear market
- a 10% correction or
- a flat year.
So, put these two together and you have a reliable roadmap for 2012 – 2013.