There is no question January 2016 has been one of the worst months in recent memory. Volatility is high, investors/traders are on edge and wondering if the weight of poor economic growth, a hawkish Fed and surprise news from overseas dropping like scud missiles in our backyard. If you have been long this market, it hasn't been fun. However, we might see a change coming soon. Reason? The Groundhog month of February.
2016 marks the third consecutive year of poor January performance. in '14 and '15 the averages were knocked back hard amid higher volatility. The moves lower tended to be a spillover from the end of the prior year, where Santa Claus failed to show up. Market conditions were weak, bears were squawking and talk of higher interest rates entered the conversation.
Yet, once the month ended and selling abruptly halted, buyers came back with a vengeance. Each of the last two years saw stocks take off in February and launch a move into the Spring.
Now, it's far too early to speculate on next month's action, but let's keep this in mind. If you're following the action closely and are ready to move then possibly some good profits may be at hand.