Guide · Calendar
Does January Barometer work?
Across 375 stocks, January Barometer cut the worst fall on 86%, beat buying and holding on risk-adjusted return on 16% and on raw return on 13%. Mainly a seatbelt: it softened the big falls on most stocks, but usually gave up return to do it.
What it predicts
If the S&P 500 rises in January, hold the stock for the rest of the year. If it falls, sit out until next January.
- At the last close of January, measure SPY's January return: its last January close against its last December close.
- In from that close to the last close of December if the return is above zero.
- Out from that close to the last close of December if it is zero or below.
- In during January itself, while the new reading forms.
Calendar plays bet that some parts of the year and month have been reliably stronger than others. The family guide
How to use it
- It trades rarely (about 0.9 switches a year), so it suits someone who checks in occasionally, and a single bad call can last months.
- Expect to be wrong more often than right: only 40% of its calls worked. Its results come from the size of the winners, so following it means sitting through strings of small losses.
- It worked best on Micro caps (50% beat holding on risk-adjusted return) and worst on Semiconductors (0%).
- Use it as one input. Your signal combines the plays you count with the other factors you weight into one call.
When it worked
January Barometer did best against holding in the 2008 crash (+29% median gap) and worst in the 2020–21 rally (−46%). Median gap in return against holding the same stock (per year over stretches longer than 18 months; crypto excluded).
| 2008 crash | Recovery 2009–19 | COVID drop | 2020–21 rally | 2022 bear | Since Oct 2022 | |
|---|---|---|---|---|---|---|
| January Barometer | +29% | −11% | +27% | −46% | +17% | −2% |
Where it worked
By kind of stock: how often it beat holding on risk-adjusted return, and the median Sharpe ratio gap.
| Group | Beat holding, risk-adjusted | Sharpe gap |
|---|---|---|
| Micro caps | 50% | +0.01 |
| Healthcare | 44% | -0.05 |
| Media & telecom | 30% | -0.09 |
| Software & devices | 24% | -0.09 |
| Financials | 23% | -0.09 |
| Sectors | 17% | -0.10 |
| Big tech | 17% | -0.10 |
| Industrials & materials | 16% | -0.14 |
| Energy & power | 15% | -0.13 |
| Consumer & retail | 15% | -0.19 |
| Indexes & ETFs | 14% | -0.07 |
| Industrials & rentals | 11% | -0.24 |
| Metals & mining | 10% | -0.10 |
| Real estate | 5% | -0.09 |
| Semiconductors | 0% | -0.17 |
Where it helped most
Sharpe ratio gap against holding, stocks with 3+ years of history
Right now
January Barometer holds 375 of 377 names as of the Oct 13, 2026 close.
No changes of call in the last two weeks.
Backtest results since 2005 (or as long as each stock has traded), against holding the same stock over the same dates, after 0.05% per switch. Past results don't promise future ones. This analysis does not constitute trading advice. Please meet with an advisor or independently review sources before making any decision.