Are you feeling uncertain about the price action so far in the new year?
“Up January, up year,” some say…
Not to burst any bubbles but generally speaking, every trading year has a day — or two or three — of reckoning.
And this year will be no different. Regardless of economic circumstances or bear market years like 2022, markets move in cycles over the longer term.
Take a look at the year-open price retests during these trading years boasting positive first months…
- 1994-99.
- 2003.
- 2006-07.
- 2011-12.
Be Flexible With Landings
Of the 12 years sampled, all but two ended the year in the positive. Of the two that ended down, they were only slightly negative, with the following January and year trading nicely to the upside — see 1994-95 and 2011-12 with 2013.
Note the calendar timing of the year-open tests. This is very important… It comes most often in the summertime, but not always.
Money is made in markets that move. And markets move up and down with an upward bias. Sometimes, they move drastically down — bear markets — and shake out a lot of traders.
For that matter, January 2023 is one week from closing. The S&P 500 is about one ATR (Average True Range, currently about 100 points) away from its year open. That’s not a lot of points…
Take Steps Forward
Here’s the real point: Be prepared instead of scared.
- Learn and use a variety of proven strategies with a variety of time frames to add diversity to your portfolio.
- Measure your success, and…
- Stay positive.
If there’s one chart I can’t stop seeing, it’s this one from Bespoke. Note the date of the last time we were overall bearish for 54 weeks in a row. History is of course not indicative of future results. It just rhymes at some points in time.
Think and Win!
Celeste Lindman
Celeste Lindman Trading
