Wednesday, January 9, 2008

I Stand Corrected

From today's Marketbeat Blog:

The first five days of the year, when the S&P 500 lost 5.3%, was the worst since 1930, points out Jeffrey Hirsch of the Stock Trader’s Almanac. However, Mr. Hirsch says the “first five days” indicator, which has proven reasonably accurate in predicting how the rest of the year will unfold, is less accurate when the market falls in that time. Furthermore, the years when the market starts off notably terribly, such as in 1991 and 1978, stocks ended the year higher. As Bill Luby of the Vix and More blog put it, “If there is any message worth remembering from the data above, it is that good starts tend to persist, ugly ones tend to reverse, and slightly down beginnings run the greatest risk of turning into a rout.”


In other words, my post this morning about the First Five Days was incorrect.

My compliments to an Anonymous commenter who pointed that out.

Let me rephrase: This year has started out really badly.