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A January 2023 preview based on seasonality

Updated: Jan 13, 2023

January tends to be a bullish month, right? Let's dive in to it based on seasonality from the last 20 years of trading.


S&P 500


55% of the time the S&P 500 closes down an average of 0.3%. While past is not prologue, it is important to look at these trends to evaluate whether or not the probabilities are on the side of bulls or bears.



NASDAQ


55% of the time the NASDAQ closes January positive, with an average gain of 0.4%. Interesting to see this divergence vs the S&P 500. Will this potentially positive seasonality help the beleaguered mega caps? Time will tell.


In conclusion


Seasonality points to a mixed picture in January, with the last 20 years of trading pointing to odds of a lower S&P 500 and a higher NASDAQ. Some say "as January goes, the year goes" but the picture may be more complicated than that next year with all eyes on Fed policy as the driving force behind price discovery as the market awaits signs that the Fed has completed their tightening cycle.





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