- Dollar Trouble, Oil's Bubble Could Derail Recovery
- Why Stronger Chinese Yuan Would Benefit US Investors
- Hewlett-Packard to Acquire 3Com for $2.7 Billion in Cash
- AIG CEO: I Remain 'Totally Committed' to Firm
- CNN Anchor Lou Dobbs Says He is Leaving Network
- A Day on the USS Harry S. Truman
- How the Droid and Google Threaten the GPS Makers
- Commercial Real Estate Near Disaster: Fund Manager
- This Town Will Pay YOU $10,000 to Buy a House
- What to Expect From Disney Earnings?
- HP's Shot Across Cisco's Bow
- USC Football Blog Leads All-Access Space
- Clowning Around At Work
- Ahead of Earnings Disney Restructures Studio
- Nov. 11: Unusual Volume Leaders
- 3 'Clear Sailing' Mid-Caps For Investors: Strategist
- Intimate Apparel Sales Heating Up: Maidenform CEO
- A Day On The USS Harry S. Truman
MOST SHARED
- Hewlett-Packard to Acquire 3Com for $2.7 Billion in Cash
- USC Football Blog Leads All-Access Space
- Dollar Trouble, Oil's Bubble Could Derail Recovery
- Addicted to Easy Money?
- Credit Is Thawing, But Businesses Still Hesitant to Borrow
- Why Stronger Chinese Yuan Would Benefit US Investors
- Oil Tomorrow
- HPQ to Acquire 3Com
Text Size 
The S&P 500 is in danger of setting a negative trend for the whole year if it closes lower for the first full week of the New Year, Royce Tostrams, technical analyst at Tostrams Groep, told CNBC.
If the market reacts badly to the monthly nonfarm payroll data and ends the week in the red, it would predict another dire year for the index, according to the “January Effect,” Tostrams said.
Video: watch the full Royce Tostrams interview
“Historically, if the S&P goes up in the first week of the year, then the trend for the rest of the year will also be positive … If the S&P falls in the first week of January, then it will fall for the rest of the year,” he said.
“The January effect has been observed numerous times through history and since the ‘60s, (it) has been repeated in about 75 percent (of years),” he added.
In 2008, the “January Effect” neatly predicted the weakness to come as the S&P fell over 5 percent in the first week of the year, according to Tostrams.
The S&P [.SPX
Loading...
()
] is struggling to stay in positive territory for the week so far and faces a dismal jobs report later on Friday. Analysts expect the U.S. economy to have lost 550,000 jobs, which would underscore the extent of the economic slowdown.
However analysts are divided as to whether job losses of that magnitude would cause a selloff in stocks. Some believe that a dose of bad news would give investors a sense of progression through the inevitable.
The S&P opened at 929.17 on Monday 5th of January and closed at 909.73 on Thursday.
Tostrams’ target for the S&P is between 1,000 and 1,450 points, which are the November and October peaks of last year.
“The pattern for the S&P 500 is sideways so this is not a market for investors, this is only a market for traders,” he warned.
For the Investor:
Market Tips: "Depression-Led Strategy"; Gold to $1,000
Print
Email
- Bernard and Ruth Madoff's personal possessions will be auctioned this weekend. Click ahead to see.
- US real estate prices have fallen dramatically, but some places are still doing well. See the best-performing zip codes this year.
- An Italian cashmere maker aims to make profits while creating ideal conditions for his workers.
- Just in time for the holidays, the Triumph company of Japan offers the latest innovation in women’s undergarments.
- The real result of health care reform will be bloated government and higher deficits, says Larry Kudlow.
- Vote and suggest your own, and remember--there's a fine line between a hero and a zero.
Data is a real-time snapshot *Data is delayed at least 15 minutes