Stocks rose strongly for the month of January and that could lead to more gains this year, history shows.
The S&P 500 climbed 5.62 percent last month, marking its best January performance since 1997.
"The old Street saying is 'as goes January, so goes the year,' which is correct 71.9% of the time (since 1928)," said Howard Silverblatt, senior Index analyst at S&P Dow Jones Indices, in an email. "It adds to the momentum and hopes."
This trend is known as the "January Barometer," a term coined in 1972. Between 1950 and 2017, the barometer has been correct 58 of 67 times, or approximately 87 percent, according to the Stock Trader's Almanac.
It has also been accurate in predicting the market's direction in recent years. Since 1980, the January Barometer has correctly predicted the S&P 500's year-end direction 68 percent of the time.