The Winans Trend Indicator(TM) has given its first sell signal since January 2008 which confirms the negative signal given by the Winans January Barometer
earlier this year.
As the table shows, the buy and hold strategy dramatically underperformed portfolios where exposure to the stock market was adjusted with time-tested technical indicators such as the 200-day moving average or the January Barometer.
Not only did it underperfom the simple, yet effective strategies of the 200-day moving average and the January Barometer, but it also underperformed buying and holding 90-day T-bills (annualized results of 4% and 1% versus 5%).
The Incredible January Barometer (Devised 1972): Only Five Significant Errors in 59 Years.
1933 Lame Duck Amendment: Reason January Barometer Works.
For a full summary of this research and to view S&P January Barometer portfolios, click here.
Standard & Poor's Equity Research indicates that, like the January Barometer for the overall market, the best-performing industries and sectors during the month of January, as a group, can be successfully used to establish a "frozen" portfolio for the coming 12-month period.
The famous January Barometer
theory espouses that negative performance in January is typically a bad omen for the remainder of the year, particularly on the heels of two bullish years.
Based on the January Barometer
, which maintains "as goes January, so goes the year," this bodes well for the market's prospects.
The January Barometer, devised by Yale Hirsch in 1972, is based on whether the S&P 500 (^SPX) is up or down in January.
Even though the market has long-term upward bias, the January Barometer has an excellent record (88.
Since 1950 the January Barometer
has predicted the annual major trend of the market 92.