The market posted an 8.6% drop for the month, marking its worst performance on record for the month of January, and a pretty bad omen for the rest of the year, if one believes the old adage.
According to the Stock Traders Almanac's January Barometer, the month of January tends to predict the direction of the market with a 91.4% accuracy ratio, with only five major errors recorded since 1950.
The barometer, created in 1972, is based on the performance of the broad S&P 500 index.
Based on broader research from Quantitative Analysis Service, the month of January works accurately at predicting market direction 65% to 75% of the time.
"That's not an impeccable record," said Ken Tower, market strategist and senior vice president at the firm. "But, along with April, it definitely has a better track record at predicting the year than any other month in the year."
The S&P 500 index (SPX), used by most investing professionals as a gauge of the broader market, fell 8.6% for January.
This marked the worst January performance on record for the S&P, topping a 7.6% drop in January of 1970.
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