Following The Fly’s post on how fucked the January effect is I thought I would follow up with some graphs. I downloaded the Dow data and popped that shit into excel.

Ten of the fifteen years staged some kind of recovery or gave you a selling opportunity close to the year’s high by April. So, even if they headed lower or were range bound for an extensive amount of time after April, you can place a modicum of hope in a reprieve. Of course, it is hard to say if we already got that opportunity a la 1984 or if were about to get it, a la 1988. YMMV.

Of the ten selling bounces the market gave, seven began in the first 10 days of March. So, if you believe at all in calendrical predictability that might be a good time to look for a reflexive bounce. I don’t place too much emphasis on stuff like that, but it’s nice to know.

Since I wasn’t alive or active in the market for the majority of these, I don’t know the specific catalyst that sparked the rallies. Judging by the time frame, it could be better than expected earnings.

One thing remains clear: the January effect doesn’t always work especially in “recession” years, and we still could fall another 1000 points before I’d begin to look for a “calendar bounce.”

Of course, if you buy solely on the hope of a “calendar bounce” March 1st and nothing more, you’re an idiot.