By Ron William, CFTe, MSTA

Will lightning strike twice?

Happy New Year and welcome to 2023! We kick-start by asking how market returns should prevail and will lightning strike again, from last year’s worst than expected shakeout? Seasonality patterns can help offer early clues. The calendar month of January originates from ancient Roman culture, named after Janus, a dual-faced god that could see both the future and past (Figure 1).

Roman God Jânus

Indeed, over the ages this archetypal symbology has influenced our collective psychology and even financial market analysis. One such manifestation is the January Barometer (JB), which infers stock market performance in the coming year. Put simply: “As the year starts, is how the year will [likely] go.”

The JB was popularized in the Stock Trader’s Almanac in 1967 and recently studied in a paper. The numbers are persuasive. Over 62 years studied, the market’s mean return (using equal-weighted NYSE stock returns) was 7.2% for the next 12 months when January was a down month (a third of the time), compared to 18.9% when January was positive. A look back over the past three years demonstrates a higher accuracy (Figure 2).

New Years Seasonality

In behavioral terms, the JB measures investor sentiment at the turn of the year, which is often a pivotal time. However, it can also serve as linear trend extrapolation, while experience teaches us that the trend is only your friend – until it bends! Figure 3 illustrates four different seasons of the JB, using DJIA price data, including examples of trend extrapolation (+/+ & -/- quadrant) and mean-reversion (+/- & -/+ quadrant)(Figure 3).

Scenario Analysis

There are three key setups: 1) 2018 Volmageddon, which many will remember as a record-breaking start, compounding the streak of 10 consecutive prior up months, thereafter followed by an 18% down year, amplified by several tail-risks. A compressed, birds-eye, view of this event can be seen Figure 4, as part of the JB’s 20-year historical performance.

January Barometer

2) In contrast, a bullish variation of the same theme was during the 2020 pandemic, which extended prior year gains, preceding a 35% cliff drop. However, it later seeded one of the fastest bear market recoveries, up over 120% from the crash lows to the all-time highs. 3) A final thematic variation is the 2008 GFC, which featured one the worst January performances (-13%), later echoed again during 2022.

Each of these JB setups offer useful scenarios to consider here and now: good, bad and ugly. Figure 5 recalls the latter, with potential for lightning to strike again, akin to 2022 and now. Many key markets are already under pressure, notably S&P500, after failing to break its 200-day trend four consecutive times. Recall our Roadmap model, remains bearish for H2 2023-2024.

Historical Rhymes

Consensus estimates remain polarized and divergent from the market reality, especially during outlier periods (Figure 6). Looking ahead the world remains on edge and should heed the lessons from the ancient Roman god Jânus!

S&P Consensus Estimates v. Actual Returns

Thank you to all FSC Members for all your kind feedback and insightful questions on our FSC blog series. Welcome more interaction at

Ron William, CFTe Bio

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Ron William, CFTe, is a market strategist and educator/mentor with more than 20 years of experience working for leading macro research and institutional firms, producing tactical research and trading strategies. He specializes in global, multi-asset, top-down framework, grounded in behavioural technical analysis, driven by cycles based on the "Roadmap" signature model of veteran market technician Robin Griffiths, published in his book Mapping the Markets.”

Ron also applies a "market & mind" approach at IntensiChi, using the latest techniques in behavioral-risk models and neuroscience sourced from expert groups. He further supplements with mentoring/coaching, trained by the International Coaching Federation (ICF), and teaches a regulatory approved masterclass in Applied Behavioral Science, with investment, private banks and CFA Societies.

Ron's primary work, as part of his current institutional market advisory firm (RWA), acquired global industry recognition as winner of “Best FX Research” in 2020. Financial media programs and industry publications regularly feature his market insights, including “Is the big cycle about to turn?”, predicting the 2020 crash and alerting the “Minsky paradigm” of 2020 H2-2022.

Driven by high-integrity education, Ron serves as part of the education committee of the International Federation of Technical Analysts (IFTA), Development Director at the Foundation of the Study of Cycles (FSC), Head of SAMT’s Geneva Chapter, and an honorary member of ESTA. He is also a visiting lecturer at universities, active guest speaker for the CFA, CAIA and CISI, and senior teacher at colleges offering an accredited diploma in trading and investing.