[转贴] January Gains Frequently Correct or Consolidate in February

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By Jeffrey A. Hirsch

Usually the weak link in the Best Six months, February tends to follow the current trend, though big January gains often correct or consolidate during the month of Valentines and Presidents as Wall Street evaluates and adjusts market outlooks based on January’s performance. Since 1950, January S&P 500 gains of 2% or more corrected or consolidated in February 70.4% of the time. January losses were followed by February losses 62.5% of the time.

Since 1950, February is up only slightly more than half the time and, depending on the index, up or down marginally on average. However, small cap stocks, benefiting from “January Effect” carry over; tend to outpace large cap stocks in February. The Russell 2000 index of small cap stocks turns in an average gain of 1.0% in February since 1979—just the seventh best month for that benchmark. A very strong February in 2000 boosts NASDAQ and Russell 2000 rankings in election years. Otherwise, February’s performance, compared to other presidential-election-year months, is mediocre at best with no large-cap index ranked better than ninth (DJIA and S&P 500 since 1952, Russell 1000 since 1980).