ONE BAD AND ONE GOOD NEWS

The bad one is the January-barometer effect. If the market closes in red January the history says that is not a good sign for the year. In 2015 the S&P 500 fell 3.1% this January. So we have to start worry? Really predicts its performance for the rest of the year? I am a bit sceptical, this January barometer historically proven is not more efficient than coin-flipping. Just take a look for last year when Dow plunged 3.6% and finally the year of 2014 was really nice.

The good news is that many investors think the market has been for 6 years bullish so it needs to come a bearish period this year. But the fact is that since 1920 the DJIA delivered five times a longer rally than 6 years. So, there is still a room for more gains.

The real good news is that if the market is in 6 years gain in raw there is a 70% chance to get higher in the 7th year further. Which is pretty fair and much better than coin-flipping or roulette 50% or less chances.

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The BFM Assets Team.