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Unless a person lives in a cave, I suspect by now you’ve heard the S&P 500 was down for the month. I suspect you’ve also heard, “So goes January, So goes rest of the year!”
Looking back over the past 25 years, when the S&P 500 was down 2% or more for the month, 75% of the time it ended higher by years end! The average gain was just under 8% for the year.
Two times, a down January, was bad for the S&P in the past 25 years ( 2000 and 2008).
Yesterday I shared that the Dow was facing what could be an important Fibonacci extension level. In 2007 the Dow hit this extension level and stopped on a dime, leading to the poor 2008 performance (See post here)
The odds may be low that the Fibonacci extension level stops the Dow again in its tracks, the impact could be very important if it does!