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7 Studies That Forecast a Bottom in the 2023 Stock Market Including the January Barometer, Wyckoff Pattern, Benner Cycle & More


The 2022 stock market is a year most traders are happy to put behind them. As the saying goes, ‘in a bull market, everyone makes money, and in a bear market, nobody does.’

The 2022 January barometer looked bleak from the start. In the end, we had one of the worst bear markets in years. Review the 2022 January Barometer results from last year in this blog post.

Now we are at the end of January 2023; what's the January Barometer forecasting for this coming year?


In this post, we’ll look at a few studies that give us a forecast for the year:

  • S&P500 January Barometer Report
  • ​Dow Jones Industrial Average January Barometer
  • ​​DJIA: The Long-Term Market Barometer
  • ​Wyckoff Accumulation Study
  • ​Benner Cycle Low 2023 “Good Time to Buy”
  • ​Decennial Report For Years Ending in ‘3’
  • ​Pre-Election Seasonal Pattern
  • ​Will Bitcoin Bottom in 2023?

S&P500 January Barometer Report

“As Goes January, So Goes the Year”

The January Barometer has an extremely high accuracy rate of over 80%, so it’s an important tool to pay attention to as a stock market trader. If January's performance is positive, the rest of the year will likely be positive.

DJIA: Long-Term Market Barometer

The Dow Jones Industrial Average, also referred to as the Dow, is a stock market index of 30 prominent companies in the USA. It’s one of the oldest and most widely used stock market indices, and we can analyze it as a barometer for the entire market.

First, let’s look at the long-term DJIA chart dating back to before the late 1800s.

Brian often talks about the Fear/Greed cycle, shown here on the DJIA chart. We are now into the Millennial Greed Cycle, and if you zoom into this cycle, you can see 2023 between the two green dotted lines.

Looking closer at the January Barometer for this chart, you can see that it mirrors other studies in this post. This study also suggests sideways bottoming action, with a generally bullish outlook for the year.

Benner Cycle Low 2023

In previous posts, we’ve talked a lot about the Benner Cycle, anticipating this year as a year that is likely to mark a bottom in the market. Read more about the Benner Cycle here: Predicting 100 Years of Market Movement

This study is significant because there are several years between each pivot. The next important year will be 2026 when Benner says it will be a good time to be a seller.

You can pick up a Benner Cycle mousepad at the TRI shop!

Decennial Report For Years Ending in ‘3’

The Decennial Report is a study of every year ending in the same number. Expert analyst Larry Williams likes to use this study and references Edgar Lawrence Smith who first presented the Decennial theory in his book Tides in the Affairs of Men in 1939.

One of our advanced traders at TRI, Cole, specializes in cycles and cycle theory and shared his version of the 2023 Decennial Pattern based on every year ending in 3 starting from 1949.

This study suggests that 2023 will be a sideways year with a significant bottom mid to later in the year and bullish strength coming in at the end of the year.

Pre-Election Seasonal Pattern

The Pre-Election Seasonal Pattern, refers to a historical analysis of presidential term years and how they affect the market. The study for this year suggests that markets typically perform well during this period, with more volatility leading up to the election.

In the new Stock Traders Almanac 2023, Jeffrey A. Hirsch shared this pre-election seasonal pattern. This is yet another signal that the market wants to bottom this year and push higher, although it suggests this will be a slow grind up with a lot of price washing in both directions. Here's a link to the Stock Trader Almanac 2023:

What Does a Market Bottom Look Like?

One way to see how a bottom may appear is to use a Wyckoff Accumulation Study. Richard Wyckoff is a famous investor who outlined market movement methods based on institutional investing. Traders and investors use these patterns to identify market trends and make profitable trading decisions.

In a bottom (Accumulation period), the market can often mirror the Wyckoff Accumulation study.

Here’s a breakdown of what happens in each phase of the Wyckoff Accumulation study.

Wyckoff Accumulation Study Phase A:

  • Preliminary Support" (PS) occurs after a down move, with signs of high volume and spreading and the first indication that selling may end soon as buyers appear.
  • "Selling Climax" (SC) occurs when PS fails, price violently sells off and spreads can widen to extremes due to panic selling.
  • ​"Automatic Rally" (AR) happens when late sellers are punished by buyers causing price to reverse with high intensity due to short sellers covering positions.

Wyckoff Accumulation Study Phase B:

  • "Secondary Test" (ST) is a controlled revisit of the lows with no increase in volume from sellers.

Wyckoff Accumulation Study Phase C:

  • "The Spring" is a hard test of the low to mislead participants into believing the trend is downwards, but price should quickly reclaim the structural level lost.

Wyckoff Accumulation Study Phase D:

  • "Last Point of Support, back up, and sign of strength" (LPS, BU, SOS) is a clear shift in price action from prior activity to the start of the range, with high volume and significant ground covered.

Wyckoff Accumulation Study Phase E:

  • Demand dominates, and markup is visible in the Trading Range (TR). Brief pullbacks may occur, but are buying opportunities as new TRs (called "stepping stones") may form from profit-taking and re-accumulation by large operators, leading to higher price targets.

Wyckoff Accumulation Study Phase E:

Bitcoin is in its first year of a four-year cycle, with the halving coming up in early 2024. This year it will likely mirror the market and have a sideways bottoming year, with a potential secondary test of the lows as suggested by the Wyckoff accumulation pattern.

Bitcoin also tends to bottom around six months before the halving event, meaning this year, we should see a bottom in Bitcoin and the start of a new crypto bull cycle. Here’s Brian’s breakdown of the 4 year Bitcoin Halving event.

One TRI’er shared this 4-year bitcoin pattern chart, suggesting that although we are at the bottom of the cycle, there can be a lot of chopping up and down as we carve out a saucer bottom on BTC before the bull resumes.

Conclusion: Sideways Yet Bullish

This post looked at the January Barometer, Wykoff accumulation, 2023 Benner Cycle Low, S&P Pre-Election Year Seasonal Pattern, and the Decennial Pattern. All suggest that we will see a bottom this year, a lot of sideways chop, and likely ending the year higher than we started it.

The best way to understand how this year may play out is by listening to the wise words of Samual Benner.
“Years of hard times, low prices, and a good time to buy stocks “Corner Lots,” Goods, etc., and hold till the “Boom” reaches the years of good times; then unload.”


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