Well, now it’s official. The January Barometer has spoken … and the reading is bearish.
For the record, the S&P 500 Index declined 5% for the month of January. This stands in sharp contrast to typical January strength, with stocks up 62% of the time historically, posting an average gain of 1.2%, according to Merrill Lynch research.
And this unusual seasonal weakness extends even further back than New Year’s Day.
In fact, the three-month period from November through January is historically the best time to invest in stocks, with the S&P up 67% of the time and posting average gains of 3.4%. But not this time.
|Market history during Year 4 of a lame-duck presidency isn’t encouraging.|
The S&P fell 6.2% in the three months ended Jan. 31, 2016. And that’s a doubly bearish signal for the stock market.
It’s a rare event, occurring only 20 times since 1929, but when the November-through-January period AND January itself both decline, the chances of a full-year stock market decline are 65% with an average loss of 4.7%.
The last time it happened was 2007-08. Yikes!
But wait, lately we’ve heard a lot of chatter in the financial media about how this is a presidential election year, which is typically bullish for stocks, right? Well, yes and no.
HUGE Investment Opportunities!
The International Energy Agency (IEA) just announced that demand is about to rise a whopping 1.1 million barrels per day, a 57% surge over last year! That will soon drive energy stocks like these into the stratosphere. Don’t miss the greatest oil and energy fire sale in 30 years! Click here for more information!
While it’s true that Year No. 4 of the presidential cycle has typically delivered solid returns of 10.4% on average since 1928, and up 73% of the time, the same isn’t true during Year No. 4 of a lame-duck presidential election year.
In fact, the last year of a two-term presidency ranks dead last by returns since 1953, with the S&P 500 Index suffering a median loss of 6.6%, according to Ned Davis Research. While it’s a relatively small sample size, the stock market has been down three out of four lame-duck election years since the Eisenhower Administration.
That’s not a good batting average, and probably has a lot to do with contentious campaigning, with market volatility on the rise as election day approaches.
Bottom line: It looks like stock investors could be in for another rocky year in 2016, so keep your safety belts securely fastened.
P.S. Kathy Lien and Boris Schlossberg WON 81% of their recommended trades in 2015.
Now, they say this NEW forecast and aggressive trade could turn $10,000 into $150,000.
If they’re right, it could change your life.
So the $150,000 question you have to answer now is … Are they right?
Click this link to view their special video presentation with Mike Larson — before it goes offline tonight!