The January Barometer is a market theory that suggests the performance of the stock market in January can predict its performance for the rest of the year. This concept was first introduced by Yale Hirsch in the 1967 edition of the "Stock Trader's Almanac". January has shown a stronger correlation with full-year performance compared to other months.
Primarily applied to the S&P 500 index in the United States.
The S&P 500 is a stock market index that tracks the performance of 500 of the largest publicly traded companies in the United States. It is a capitalization-weighted index, specifically a free-float weighted index, which means that companies with larger market capitalizations have a greater impact on the index's value. Market capitalization is determined by multiplying a company's stock price by its total number of outstanding shares. The S&P 500's broad market coverage, regular updates, and wide acceptance in the financial industry contribute to its significance as a key indicat…