The S&P 500 and NASDAQ dropped 3 percent this week, while the Dow Jones fell 4 percent, marking the worst ten-day start to a year in the history of the stock market. A number of interrelated factors—the plunging price of oil, which fell to below $30 a barrel; concerns about slowing growth in the U.S.; and China’s tumbling stock market—are largely to blame.
All of this is a very bad sign for the year to come. The pithy “January indicator,” introduced by Yale Hirsch’s Stock Trader’s Almanac, “posits that a decline in the Standard & Poor’s 500-stock index in January means that major averages will also end that calendar year with a decline, and vice versa if stocks rise during the month.” If that seems silly—and it should, because time is a construct, man—Hirsch’s son Jeff told the New York Times that it’s been right 87.7 percent of the time since 1950.