A theory stating that the performance of the S&P 500 in January predicts its performance for the remainder of the year. That it, if the S&P ends January higher than it began, there will be a rising
stock market and vice versa.
Investors using the January barometer make
investment decisions based on this performance; they
buy S&P 500
stocks when performance is strong in January and
sell when it is not. The January barometer has had mixed results over the years.