They say that as January goes, so goes the year for the stock market.
The Dow Jones Industrial Average opened on Jan. 4 – the first trading day of the year – at 10,430. As I write this post, it’s now 10,543, down about 180 points on disappointing news from the banks.
Disappointing news from the banks? Go figure. Not enough has changed. The too-big-to-fail banks have only gotten bigger, and while they appear to be setting aside less for loan losses, their loan losses are still sizeable. And the mortgage foreclosure crisis that started this mess is raging on.
No Wall Street pattern universally holds true, but the year is sure off to a sideways start.
Not even the Democrat’s stunning loss in Massachusetts – and with it the prospect that expensive health care reforms could be stymied – is lifting the market today.
I made my stock market predictions for 2010 at the beginning of the month, not really committing, but predicting the market could hit 11,000 on the high, and perhaps even retest the lows of last year, falling below 6,500. (Click here to read my predictions.)
So far, January is suggesting it will do neither. “The January Effect,” the bullish trend that often drives the market as investors ante up at the beginning of the year, isn’t having any effect at all.
Any predictions on where the market will go this year?