- Car Insurance Scofflaws Raise Health Reform Doubt
- Rush Starts as Holiday Shopping Season Revs Up
- US Markets Bracing for Selloff on Dubai Debt Worries
- US Dollar Falls to 14-Year Low Against the Yen
- ING Prices Share Issue at Hefty Discount
- UK's Darling to Downgrade 2009 Growth Forecast
- Tommy Hilfiger's Estate in Conn. Sells for $20 Million
- Cheap Robotic Hamsters Are Holiday's Unlikely Craze
- Fannie Mae to Tighten Lending Standards: Report
- 4 Thanksgiving Week Buys For Your Portfolio: Market Pros
- There's a 'Great Chance' For a Double-Dip Recession: Strategist
- Revenge of the Gangsta Nerds
- Will TCU See The "Flutie Effect?"
- Retail Earnings and Sales to Improve in Q4: Analyst
- Consumers Catching the Holiday Spirit
- It's Beginning To Look A Lot More Riskless
- Crescenzi: Claims Level Suggests End to Job Losses
- Hedge Funds Take Early Lead in Warren Buffett's 'Big Bet'
MOST SHARED
- Banks Play Down Dubai Exposure, Investors Still Wary
- No Thanksgiving Rest for Retailers in Sales Race
- UK's Darling to Downgrade 2009 Growth Forecast
- More Asia Executives Resigned to Economy Flights: Survey
- Attraction of Switzerland to Businesses
- US Markets Bracing for Selloff On Worries About Dubai's Debt
- Oil Falls Below $74 on Dubai Default Worries
- Dubai Debt Delays Revive Fear of Financial Crisis
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
- What you need to know.
- Social enterprises are becoming a new asset class for the ethically-minded.
- Ever wished your cab driver would stop nattering and just get to where you're going? Well that moment is near(er).
- Bill Griffeth is taking a leave of absence from CNBC and Power Lunch for a year. Here's a message from Bill.
- More shoppers than ever plan to comparison-shop this season. Who will benefit?
- It may be the most unusual guide to business you'll read.
Data is a real-time snapshot *Data is delayed at least 15 minutes