Investing.com - After the first month of 2017 ended with gains, LPL Financial revisited the data related to the January Barometer, the theory that how the S&P 500 ends January will determine the direction for the rest of the year, and came to the conclusion that the positive start to equities this year could be a sign of future strength.
These strategists noted that the full month of January didn’t have a single 1% close lower, none of the trading days was negative on a year-to-year basis, and the S&P ended the month with gains.
Apart from the fact that a positive end to January resulted in a bullish year 88% of the time, they indicated that in situations where all three of the prior criteria were met, the rest of the year was higher on all six occasions, pocketing an average return of more than 15% with a median return of nearly 11%.
“They say it isn’t where you start, but where you finish,” LPL Financial senior market strategist Ryan Detrick said.
“That’s very true, but stock market history would say if you start off with an exceptionally solid January (like we saw in 2017), that could improve the odds that you might finish strong,” he concluded.