Does January Really Set The Tone For The Year? Testing The S&P 500 January Barometer

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The January Barometer is one of many “legends” that circulate in the financial markets. Its logic is simple: the performance recorded in January is said to predict how the index will behave for the ...

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Its logic is simple: the performance recorded in January is said to predict how the index will behave for the ...</p>\n\n<a href=\"https://www.benzinga.com/Opinion/26/02/50383205/does-january-really-set-the-tone-for-the-year-testing-the-sp-500-january-barometer\">Source Link</a>\n\n</div>\n","source":"benzinga_recent_news","html":"<!DOCTYPE html>\n<html>\n<head>\n<meta http-equiv=\"Content-Type\" content=\"text/html; charset=utf-8\" />\n<meta name=\"viewport\" content=\"width=device-width,initial-scale=1.0,minimum-scale=1.0,maximum-scale=1.0,user-scalable=no\"/>\n<meta name=\"format-detection\" content=\"telephone=no,email=no,address=no\" />\n<title>Does January Really Set The Tone For The Year? Testing The S&P 500 January Barometer</title>\n<style type=\"text/css\">\na,abbr,acronym,address,applet,article,aside,audio,b,big,blockquote,body,canvas,caption,center,cite,code,dd,del,details,dfn,div,dl,dt,\nem,embed,fieldset,figcaption,figure,footer,form,h1,h2,h3,h4,h5,h6,header,hgroup,html,i,iframe,img,ins,kbd,label,legend,li,mark,menu,nav,\nobject,ol,output,p,pre,q,ruby,s,samp,section,small,span,strike,strong,sub,summary,sup,table,tbody,td,tfoot,th,thead,time,tr,tt,u,ul,var,video{ font:inherit;margin:0;padding:0;vertical-align:baseline;border:0 }\nbody{ font-size:16px; line-height:1.5; color:#999; background:transparent; }\n.wrapper{ overflow:hidden;word-break:break-all;padding:10px; }\nh1,h2{ font-weight:normal; line-height:1.35; margin-bottom:.6em; }\nh3,h4,h5,h6{ line-height:1.35; margin-bottom:1em; }\nh1{ font-size:24px; }\nh2{ font-size:20px; }\nh3{ font-size:18px; }\nh4{ font-size:16px; }\nh5{ font-size:14px; }\nh6{ font-size:12px; }\np,ul,ol,blockquote,dl,table{ margin:1.2em 0; }\nul,ol{ margin-left:2em; }\nul{ list-style:disc; }\nol{ list-style:decimal; }\nli,li p{ margin:10px 0;}\nimg{ max-width:100%;display:block;margin:0 auto 1em; }\nblockquote{ color:#B5B2B1; border-left:3px solid #aaa; padding:1em; }\nstrong,b{font-weight:bold;}\nem,i{font-style:italic;}\ntable{ width:100%;border-collapse:collapse;border-spacing:1px;margin:1em 0;font-size:.9em; }\nth,td{ padding:5px;text-align:left;border:1px solid #aaa; }\nth{ font-weight:bold;background:#5d5d5d; }\n.symbol-link{font-weight:bold;}\n/* header{ border-bottom:1px solid #494756; } */\n.title{ margin:0 0 8px;line-height:1.3;color:#ddd; }\n.meta {color:#5e5c6d;font-size:13px;margin:0 0 .5em; }\na{text-decoration:none; color:#2a4b87;}\n.meta .head { display: inline-block; overflow: hidden}\n.head .h-thumb { width: 30px; height: 30px; margin: 0; padding: 0; border-radius: 50%; float: left;}\n.head .h-content { margin: 0; padding: 0 0 0 9px; float: left;}\n.head .h-name {font-size: 13px; color: #eee; margin: 0;}\n.head .h-time {font-size: 11px; color: #7E829C; margin: 0;line-height: 11px;}\n.small {font-size: 12.5px; display: inline-block; transform: scale(0.9); -webkit-transform: scale(0.9); transform-origin: left; -webkit-transform-origin: left;}\n.smaller {font-size: 12.5px; display: inline-block; transform: scale(0.8); -webkit-transform: scale(0.8); transform-origin: left; -webkit-transform-origin: left;}\n.bt-text {font-size: 12px;margin: 1.5em 0 0 0}\n.bt-text p {margin: 0}\n</style>\n</head>\n<body>\n<div class=\"wrapper\">\n<header>\n<h2 class=\"title\">\nDoes January Really Set The Tone For The Year? Testing The S&P 500 January Barometer\n</h2>\n\n<h4 class=\"meta\">\n\n\n2026-02-05 00:56 GMT+8&nbsp;&nbsp;&nbsp;<a href=https://www.benzinga.com/Opinion/26/02/50383205/does-january-really-set-the-tone-for-the-year-testing-the-sp-500-january-barometer><strong>Benzinga_recent_news</strong></a>\n\n\n</h4>\n\n</header>\n<article>\n<div>\n<p>The January Barometer is one of many “legends” that circulate in the financial markets. Its logic is simple: the performance recorded in January is said to predict how the index will behave for the ...</p>\n\n<a href=\"https://www.benzinga.com/Opinion/26/02/50383205/does-january-really-set-the-tone-for-the-year-testing-the-sp-500-january-barometer\">Source Link</a>\n\n</div>\n\n\n</article>\n</div>\n</body>\n</html>\n","isBrief":false,"type":0,"news_type":1,"symbol":"XDTE","symbol_name":"Roundhill S&P 500 0DTE Covered Call Strategy ETF","start_time":0,"source_url":"https://www.benzinga.com/Opinion/26/02/50383205/does-january-really-set-the-tone-for-the-year-testing-the-sp-500-january-barometer","article_id":"2609399904","we_media_id":null,"thumbnails":["https://static.tigerbbs.com//next-assets/images/benzinga-post-card-placeholder.svg?optimize=medium&dpr=2&auto=webp&width=240?op=imageView2&mode=2&width=256&height=256&quality=70&format=png"],"rights":{"source":"benzinga_recent_news","url":"https://www.benzinga.com/Opinion/26/02/50383205/does-january-really-set-the-tone-for-the-year-testing-the-sp-500-january-barometer","rn_cache_url":null,"directOrigin":true},"url":"https://stock-news.laohu8.com/highlight/detail?id=2609399904","pubTimestamp":1770224160,"columns":[],"sourceInfo":{"source_id":"benzinga_recent_news","name":"Benzinga"},"weMediaInfo":null,"summary":"The January Barometer is one of many “legends” that circulate in the financial markets. Its logic is simple: the performance recorded in January is said to predict how the index will behave for the rest of the year. A positive January implies a bullish year ahead; a negative January suggests a weaker one.In this article, we’ll examine whether this idea has any real statistical foundation or if it’s just a coincidence. To do so, we’ll use the S&P 500, the benchmark index for the U.S. stock market. The S&P500 includes the 500 largest-cap companies and provides a broader and more diversified measure compared to indexes like the Dow Jones.Our goal is to determine, based on data, whether the January Barometer has shown any real usefulness in recent decades. We'll test the idea using a systematic and repeatable approach, starting from 1990. From there, we’ll assess whether January's performance actually impacts returns over the following eleven months.Currently, the index trades around 7,000","collect":0,"end_time":0,"defaultTopTitle":"benzinga.com","property":[],"viewcount":null,"language":"en","relate_stocks":{"XDTE":"Roundhill S&P 500 0DTE Covered Call Strategy ETF","SPXU":"三倍做空标普500ETF-ProShares","HIBL":"Direxion Daily S&P 500 High Beta Bull 3X Shares","OEF":"标普100指数ETF-iShares","SPYM":"投资组合标普500指数ETF-SPDR","BK4504":"桥水持仓","BK4559":"巴菲特持仓","SSO":"2倍做多标普500ETF-ProShares","VTI":"大盘指数ETF-Vanguard MSCI","BK4550":"红杉资本持仓","BK4588":"碎股","SPXS":"三倍做空标普500ETF-Direxion","IVW":"标普500成长股指数ETF-iShares","SPYV":"SPDR Portfolio S&P 500 Value ETF","SDS":"两倍做空标普500 ETF-ProShares","BK4581":"高盛持仓","OEX":"标普100","SH":"做空标普500-Proshares","SPXL":"三倍做多标普500ETF-Direxion","GPIX":"GOLDMAN SACHS S&P 500 CORE PREMIUM INCOME ETF","UPRO":"三倍做多标普500ETF-ProShares","BK4585":"ETF&股票定投概念","BK4534":"瑞士信贷持仓","SPLV":"Invesco S&P 500 Low Volatility ETF",".SPX":"S&P 500 Index","VOOV":"Vanguard S&P 500 Value ETF","BMAY":"Innovator U.S. Equity Buffer ETF - May","IVOO":"Vanguard S&P Mid-Cap 400 ETF","IVV":"标普500ETF-iShares","SPDN":"Direxion Daily S&P 500 Bear 1X Shares"},"translate_title":"一月真的为一年定下了基调吗？测试标普500一月晴雨表","themeId":null,"isJumpTheme":false,"ttsUrl":null,"symbols_score_info":{"SDS":0.6,"ESmain":0.6,"XDTE":0.6,".SPX":1.96,"SPYV":0.6,"BMAY":0.6,"IVOO":0.6,"SPXU":0.6,"SH":0.6,"OEF":0.6,"IVV":0.6,"SPXL":0.6,"SPDN":0.6,"UPRO":0.6,"MESmain":0.6,"SSO":0.6,"SPLV":0.6,"SPYM":0.6,"VOOV":0.6,"OEX":0.6,"VTI":0.6,"GPIX":0.6,"HIBL":0.6,"SPXS":0.6,"IVW":0.6},"content_text":"The January Barometer is one of many “legends” that circulate in the financial markets. Its logic is simple: the performance recorded in January is said to predict how the index will behave for the rest of the year. A positive January implies a bullish year ahead; a negative January suggests a weaker one.\nIn this article, we’ll examine whether this idea has any real statistical foundation or if it’s just a coincidence. To do so, we’ll use the S&P 500, the benchmark index for the U.S. stock market. The S&P500 includes the 500 largest-cap companies and provides a broader and more diversified measure compared to indexes like the Dow Jones.\nOur goal is to determine, based on data, whether the January Barometer has shown any real usefulness in recent decades. We'll test the idea using a systematic and repeatable approach, starting from 1990. From there, we’ll assess whether January's performance actually impacts returns over the following eleven months.\nAs mentioned, we’re using the S&P500 for this study. It’s important to note this is a theoretical backtest of a financial index, which can’t be traded directly in real-world conditions. In practice, one would need to use a correlated instrument like an ETF, a futures contract, or other derivatives.\nCurrently, the index trades around 7,000 points. To keep the analysis clear and comparable, we’ll allocate a theoretical position of $100,000 for each trade.\nHere are the strategy rules:\nIn the following sections, we’ll see how this simple setup has performed since 1990 and whether the so-called January Barometer has shown any real advantage.\nLooking at Figure 1, we see that the equity line shows an overall steady growth, with a consistent upward trend throughout the test period. Drawdowns are present but limited, and the strategy navigates even the most challenging market phases without major issues.\nA useful reference point is the so-called “lost decade” (2000–2010), during which the S&P 500 was essentially flat due to two major bear markets, each with deep drawdowns. In this case, the impact was more muted: the system caught the positive stretches during those years and maintained a stable equity line, avoiding an overly negative outcome for the decade.\nFigure 2 confirms this behavior statistically: the average trade return is $11,157, which represents an average gain of 11.1% on the $100,000 allocated per trade. As expected from the barometer’s logic, all trades are long, and the win rate is an impressive 80.95%.\nOverall, the results suggest that in years when January ends on a positive note, the following eleven months tend to yield favorable and consistent returns.\nFigure 1. Strategy Equity Line – Positive January\nFigure 2. Total Trade Analysis – Positive January\nTo further test the January Barometer, Figure 3 shows the equity line resulting from applying the exact same logic, but in the case of a negative January: if the month closes below its opening level, we still open a long position at the beginning of February and hold it until the following January. This helps us assess whether January truly influences the rest of the year.\nThe resulting equity line is noticeably more erratic compared to the positive-January scenario: drawdowns are deeper and more frequent, particularly during volatile market periods. While the equity line still ends up in positive territory overall, the growth is far less linear.\nFigure 4 provides statistical confirmation: a total of 14 trades were taken, all long, with 9 winners and 5 losers, resulting in a 64% win rate. The average trade drops to $6,557, or about +6.5% return on the $100,000 allocated, significantly lower than in the case of a positive January.\nFigure 3. Strategy Equity Line – Negative January\nFigure 4. Total Trade Analysis – Negative January\nOne often-overlooked element here is the World Economic Forum in Davos, which takes place in January. This is where world leaders, CEOs of global corporations, institutional investors, and top macroeconomic minds gather. The economic forecasts, risk assessments, and strategic outlooks shared during this event inevitably influence market sentiment by offering an up-to-date snapshot of how global decision-makers view the world economy.\nAnother key point: even though negative Januarys produce weaker results, they don't justify holding long-term short positions. The backtest still shows overall positive returns in those years, and the equity line doesn’t support a bearish outlook for the full year. Moreover, shorting for the long term is neither common nor efficient, especially with equity indexes, which naturally tend to move upward over time.\nThat said, the fact that a negative January often leads to lower returns can still be useful: short strategies could be considered as a hedge. In other words, if January ends in the red and you’re expecting a lackluster year, it might make sense to implement specific short systems, perhaps based on mean reversion or bearish breakouts, to protect your portfolio, rather than attempting to “short the year” outright.\nThe January Barometer isn’t a golden rule, but it’s not something to ignore either. Historical data clearly shows that when January ends positively, the rest of the year tends to follow with favorable conditions: higher average returns, reduced volatility, and better odds of success for long trades.\nFor systematic traders or those managing structured portfolios, this kind of insight can be integrated into broader operational frameworks.\nUntil next time, happy trading! \nBenzinga Disclaimer: This article is from an unpaid external contributor. It does not represent Benzinga’s reporting and has not been edited for content or accuracy.","kind":"highlight","is_publish_news":true,"is_publish_highlight":false,"is_publish_live":false,"is_publish_wemedia":null,"editions":null,"column":"","sentiment":"0","news_tag":"","news_rank":0,"symbols":[],"gpt_button":0,"need_auth":false,"code":"91000000","status":"200"},"commentList":[],"isCommentEnd":true,"newsSizeData":{"likeSize":0,"commentSize":0,"repostSize":0,"favoriteSize":0,"likeStatus":false,"favoriteStatus":false},"APP":{"userAgent":"Mozilla/5.0 AppleWebKit/537.36 (KHTML, like Gecko; compatible; ClaudeBot/1.0; +claudebot@anthropic.com)","isDev":false,"isTTM":true,"tenantId":"TBGLOBAL","deviceId":"web-server-community-laohu8-v3","version":"4.36.2","shortVersion":"4.36.2","platform":"web","vendor":"web","appName":"ttm","isIOS":false,"isAndroid":false,"isTiger":false,"isTHS":false,"isWeiXin":false,"isWeiXinMini":false,"isWeiBo":false,"isQQ":false,"isBaiduSwan":false,"isBaiduBox":false,"isDingTalk":false,"isToutiao":false,"isOnePlus":false,"isHuaWei":false,"isXiaomi":false,"isXiaomiWebView":false,"isOppo":false,"isVivo":false,"isSamsung":false,"isMobile":false},"href":"/m/news/2609399904","isCrawlerRequest":true}