The good news is: Non existent.
Next week includes the first 5 trading days of February during the 1st year of the Presidential Cycle.
By most measures the returns have been positive for the period, but the draw downs have been extraordinarily large.
February
Since 1963 the OTC has been up 52% of the time in February with an average gain of 0.1% making it one of the worst months of the year. During the 1st year of the Presidential Cycle the OTC has only been up 27% of the time with an average loss of 3.8% making it the worst month of the entire 4 year Presidential Cycle. The 3.8% average loss was enhanced considerably by a 22.7% loss in 2001.
Since 1928 the SPX has been up 52% of the time in February with an average loss of 0.3% making it second to September as the worst month of the year. During the 1st year of the Presidential Cycle the SPX has only been up 40% of the time with an average loss of 1.7% making it second to September again as the worst month of the entire 4 year Presidential Cycle.
Conclusion
The market appears to be hopeless. In spite of exploding money supply and a deeply oversold condition, it continues to fall. Seasonally we are entering one of the worst months of the entire 4 year Presidential Cycle.
The table below shows every occurrence of a down January during the 1st year of the Presidential Cycle including the next month and full year performance.
..........Jan.... Feb..... Yr
1941..-3.9%...-0.8%...-17.9%
1953..-0.6%..-2.3%...-6.6%
1957..-3.2%..-3.0%...-14.3%
1969..-0.9%..-4.6%...-11.4%
1973..-2.6%..-2.7%...-17.4%
1977..-4.6%..-2.7%...-11.5%
1981..-5.0%....3.4%....-9.7%
2005..-1.7%....1.2%.....3.0%
2009..-8.6%
Edited by Rogerdodger, 01 February 2009 - 03:20 PM.
