Stock Trader's Almanac 2005
Chapter One
JANUARY'S FIRST FIVE DAYS AN "EARLY WARNING" SYSTEM
Of the 34 up First Five Days since 1950, 29 were followed by full-year gains for an 85.3% accuracy ratio and a
13.8% average gain in those 34 years. Of the five exceptions, 1994 was a flat year and four were war-related:
Vietnam military spending delayed start of 1966 bear market; ceasefire imminence in early 1973 raised stocks
temporarily; Saddam Hussein turned 1990 into a bear; and the war on terrorism, instability in the Near and
Middle East and corporate malfeasance shaped 2002 into one of the worst years on record. The 20 down First
Five Days were followed by 10 up years and 10 down (50% accurate).
In 8 of the last 13 Post-Election Years the S&P 500 posted a loss for January's First Five Days. Six were
followed by full-year losses averaging -11.1%. 1993 rebounded 7.1% after the sluggish 1992 economy that factored
into Bush Senior's ouster and 1985 followed the trend of no losing "5" years (see page 126). Five Post-Election
First Five Days showed gains and only one subsequent full year, 1973, was a loser. This was the start of the previous
major bear - caused by Vietnam, Watergate and OPEC. The other four years gained 22.6% on aver ... read full excerpt from Stock Trader's Almanac 2005 ebook