• 658 days Will The ECB Continue To Hike Rates?
  • 658 days Forbes: Aramco Remains Largest Company In The Middle East
  • 660 days Caltech Scientists Succesfully Beam Back Solar Power From Space
  • 1,060 days Could Crypto Overtake Traditional Investment?
  • 1,065 days Americans Still Quitting Jobs At Record Pace
  • 1,067 days FinTech Startups Tapping VC Money for ‘Immigrant Banking’
  • 1,070 days Is The Dollar Too Strong?
  • 1,070 days Big Tech Disappoints Investors on Earnings Calls
  • 1,071 days Fear And Celebration On Twitter as Musk Takes The Reins
  • 1,073 days China Is Quietly Trying To Distance Itself From Russia
  • 1,073 days Tech and Internet Giants’ Earnings In Focus After Netflix’s Stinker
  • 1,077 days Crypto Investors Won Big In 2021
  • 1,077 days The ‘Metaverse’ Economy Could be Worth $13 Trillion By 2030
  • 1,078 days Food Prices Are Skyrocketing As Putin’s War Persists
  • 1,080 days Pentagon Resignations Illustrate Our ‘Commercial’ Defense Dilemma
  • 1,081 days US Banks Shrug off Nearly $15 Billion In Russian Write-Offs
  • 1,084 days Cannabis Stocks in Holding Pattern Despite Positive Momentum
  • 1,085 days Is Musk A Bastion Of Free Speech Or Will His Absolutist Stance Backfire?
  • 1,085 days Two ETFs That Could Hedge Against Extreme Market Volatility
  • 1,087 days Are NFTs About To Take Over Gaming?
Is The Bull Market On Its Last Legs?

Is The Bull Market On Its Last Legs?

This aging bull market may…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

How The Ultra-Wealthy Are Using Art To Dodge Taxes

How The Ultra-Wealthy Are Using Art To Dodge Taxes

More freeports open around the…

  1. Home
  2. Markets
  3. Other

January Effect

In last week's Hybrid Lindsay forecast, Middle Section forecasts from both the Basic and Multiple cycles pointed to a high for the November run-up in the Dow on Monday, November 23. As of last Friday, both the closing and intra-day highs occurred one trading day early, the previous Friday, November 20.

Moving from the Dow Industrials to small caps... according to Stock Traders' Almanac, the January Effect (the tendency for small caps to outperform large caps in January) now begins in mid-December. The chart below shows the relative performance of small caps (RUT) versus the broader market (SPX). In October, the ratio tested the low of the last four years set during the previous October. A bearish head-and-shoulders pattern can be seen in the relative performance chart in 2015. The pattern has been triggered and forecasts a minimum decline to lows not seen since 2009.

Underperformance by small and mid-caps is a classic late cycle performance phenomena and is yet another arrow in the bear market quiver but none of the above necessarily rules out a period of outperformance by small caps during the coming December/January.

Russell 2000 / SPX Ratio from 2010

 


To get your copy of the December Lindsay Report click here.

 

Back to homepage

Leave a comment

Leave a comment