January Seasonal 2025 (Preview)

By Lawrence G. McMillan

The January seasonal trade is usually one of our best seasonal trades (right behind the October seasonal). The trade is to buy $SPX at the close of the 18th trading day of the year, and exit at the close of trading four days later. Typically, large fund managers will put money to work at the beginning of the year (hence, the positive seasonality of the January early warning system), and then complete their buying at the end of the month.

The 18th trading day this year was Wednesday, January 28th, so we’re late getting to this. Luckily, for this purpose, the market was down yesterday, and so an entry now is better than one at Wednesday’s close.

The following table shows the results from 2000, but the summary at the end includes all years back to and including 1986. There have been 31 wins and 9 losses, and on average, $SPX advances 1.1% in that four-day period.

Result

Sum: 653.8 (42.10%)
Avg: 16.3 (1.10%)
Wins: 31
Losses: 9

Originally, the system called for holding for...