• 12 hours Gold Is Beating Buffett’s Berkshire Hathaway
  • 15 hours What’s Behind The Silver Sell-Off?
  • 18 hours The Retail Apocalypse Is Accelerating
  • 21 hours The Top Tech Stocks Of The Year
  • 1 day America’s Workforce Elderly Workforce To Double By 2028
  • 2 days Toyota Tests Solar-Powered Prius
  • 2 days Why The Gold Rally Flatlined
  • 3 days The Uranium Sector Can’t Catch A Break
  • 3 days Upcoming Fed Meeting Has Investors On Edge
  • 4 days Global Gold Sector Outlines Responsible Mining Principles
  • 4 days China’s Giant Vampire Fund Loses $120B
  • 5 days McDonalds To Roll Out Robot Drive-Thru Clerks
  • 5 days Savvy Investors Are Betting Big On This Little Data Company
  • 5 days How The Government Is Wasting Tax Money This Year
  • 6 days Supply Concerns Halt Expansion On Tianqi Lithium Plant
  • 6 days The World’s Biggest IPO Is Almost Here
  • 6 days The Relatively Of Money And Happiness
  • 7 days Wall Street Unfazed By Recession Fears
  • 7 days SoftBank Urges WeWork To Pause IPO Plans
  • 7 days Anti-Aging Market To Hit $55 Billion
Zombie Foreclosures On The Rise In The U.S.

Zombie Foreclosures On The Rise In The U.S.

During the quarter there were…

Billionaires Are Pushing Art To New Limits

Billionaires Are Pushing Art To New Limits

Welcome to Art Basel: The…

The Problem With Modern Monetary Theory

The Problem With Modern Monetary Theory

Modern monetary theory has been…

  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