Conference nyoss1::market_investing

796.0. "january effect on the dow" by DANGER::LEAHY (stresstab addict) Sun Nov 27 1994 10:48

there's been a lot of discussion about the january effect recently in the
media so i got curious as to what the results have really been over the 
years. my data only goes back to 1930 but here's the results. this data is
based only on the dow index values and does not include dividends.


jim



        dow     dow     dow
	annual  january december 
year    return  return  return
-------------------------------
1930    -32.60  9.39    -11.27
1931    -54.13  -1.35   -14.56
1932    -19.69  2.10    3.29
1933    68.49   2.72    1.02
1934    3.67    6.84    1.08
1935    37.91   -2.70   2.42
1936    24.82   3.72    -1.18
1937    -32.30  4.04    -1.03
1938    28.36   1.08    4.12
1939    -2.21   -6.43   2.47
1940    -13.41  -4.03   0.03
1941    -15.02  -4.93   -2.32
1942    5.88    -2.98   3.87
1943    13.31   4.71    3.99
1944    12.07   1.09    2.54
1945    26.43   0.71    0.27
1946    -7.54   6.79    5.79
1947    2.70    2.30    0.30
1948    -2.07   -3.31   2.36
1949    14.34   2.34    3.85
1950    18.36   1.46    2.85
1951    11.78   3.71    2.65
1952    8.17    0.31    2.89
1953    -3.85   -0.81   -0.07
1954    42.95   3.36    5.30
1955    19.45   -0.01   1.46
1956    2.82    -3.10   3.92
1957    -12.16  -3.40   -2.51
1958    32.87   2.45    4.21
1959    15.62   1.08    2.25
1960    -9.30   -8.31   3.59
1961    19.81   6.22    0.32
1962    -10.11  -3.41   0.88
1963    17.96   5.58    1.47
1964    12.54   2.51    1.12
1965    11.44   3.90    2.61
1966    -18.88  1.55    -0.51
1967    15.09   8.07    2.95
1968    4.07    -5.66   -4.03
1969    -15.55  -0.18   -0.58
1970    3.67    -8.05   5.62
1971    7.18    4.57    5.22
1972    14.70   1.92    -0.38
1973    -17.53  -3.76   5.50
1974    -27.95  0.03    2.19
1975    34.87   11.34   -0.46
1976    17.00   13.58   5.82
1977    -16.86  -4.54   0.66
1978    -1.56   -5.31   -0.80
1979    3.37    4.97    2.33
1980    16.91   6.22    -0.56
1981    -10.05  -2.62   -1.71
1982    18.59   -3.49   1.50
1983    22.55   4.74    -1.29
1984    -3.29   -2.57   2.47
1985    29.01   6.22    6.09
1986    23.30   -2.62   -0.87
1987    0.60    11.97   5.24
1988    7.61    -2.83   3.17
1989    28.38   9.22    0.20
1990    -6.28   -7.81   2.65
1991    21.38   4.82    7.95
1992    4.07    1.66    0.46
1993    13.44   0.02    1.54
1994    -1.29   5.90    ----
     --------------------------   
ave     6.33    1.27    1.43
return

    Famed trader W. D. Gann believed strongly in a 10-year pattern, where
    each year in a decade had its own basic trend. Year 5 was known as the
    "year of ascension", i.e., the Year of Good Returns. Here is .0s data
    for year 5 only:
    
        dow     dow     dow
	annual  january december 
year    return  return  return
-------------------------------
1935    37.91   -2.70    2.42
1945    26.43    0.71    0.27
1955    19.45   -0.01    1.46
1965    11.44    3.90    2.61
1975    34.87   11.34   -0.46
1985    29.01    6.22    6.09
    
    Note that 1975 came on the heels of a big bear market in 1973-1974, and
    that the 1980s bull market had a pullback into August 1984.
    
    Beyond this, the Foundation for the Study of Cycles has developed a
    "30-year" pattern that postulates repeated behavior over a 30 year period.
    By this accounting 1995 should look like 1965 and 1935.
    
    One other piece of calendar-based techncal analysis calls for a major
    low on January 7th (Saturday, meaning 6th or 9th is most likely).
    
      John

            dow     dow     dow
            annual  january december
    year    return  return  return
    -------------------------------
    
    1936    24.82   3.72    -1.18
    1946    -7.54   6.79     5.79
    1956     2.82  -3.10     3.92
    1966   -18.88   1.55    -0.51
    1976    17.00  13.58     5.82
    1986    23.30  -2.62    -0.87