January effect

This time of year, much is said and written about the January effect. The tendency of the stock market to echo the January movements through out the entire year.

Adam Warner (link) cites a study that shows that there is some weak linkage, but that at least five other months have as much predictive power. The cynical person might conclude that "January is usually up, the stock market usually moves up for the year, that is all there is to it."

That said, it worked last year, and in the stock market, what has been working most recently, is what many traders use.