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Created by Yale Hirsch in 1972, the January Barometer or January Effect states, “As goes January, so goes the year”—only 12 significant errors since 1950 and boasting an 83.6% accuracy ratio.
At TRI, we’ve documented this for a few years, and every year, it’s surprisingly accurate (with a few errors along the way).
Let’s quickly review 2023’s January Barometer, and then we’ll analyze 2024.
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At the start of 2023, we shared this image:
Now, here’s what the market looked like at the end of the year.
As you can see, the barometer was highly accurate, with some inconsistencies later in the year.
The January Barometer is not an exact science and will never predict what the market will do. It’s just a general barometer for the year ahead.
Now, let’s look ahead at the 2024 January Barometer.
There are several parts of this image to consider. The year's first half looks like a consolidation sideways with some initial weakness while forming a bullish W pattern.
The second half looks strong, with a bullish run into and after the election, with a sharp pullback near the end of the year.
The January Barometer also ties in with Larry Williams's message on presidential election years, where the first half of the year shows weakness and consolidation, with the second half a strong bull.
Here’s the chart Larry shared in his video:
Click here to watch the full Larry Williams forecast video on Youtube: Larry Williams on Traders Workshop | Trading Tactics and Forecasting
Click here to watch the full Larry Williams forecast video on Youtube: Larry Williams 2024 Market Outlook | The Final Bar (12.15.23)
2024 is the most significant election year in history, with almost 3 billion people voting. Election years are often highly volatile but usually turn out bullish.
The question of “who’s gonna win” and the anticipation becomes a strong ‘buy the rumor’ event. It often doesn’t matter who wins; it's just the uncertainty and expectations that lead the market to rally.
The US stock market is usually happiest when there is a split government. If the right-wing wins, the left-wing controls Congress, and vice versa.
The stock market hates when one party is in control because politicians can screw with laws easily, changing taxes, market rules, regulations, etc.
Looking at the January Barometer, we are getting clues that the market is anticipating a split government, and there will be a strong bull market into the latter part of the year.
A major fundamental event is coming for Bitcoin this year: the Halving. The halving event is fundamentally bullish for Bitcoin, but that doesn’t mean the price will instantly go up.
Bitcoin likes to top out around a month before the halving event, setting the bottom for the blow-off top part of the crypto cycle where the price breaks to new highs.
The Bitcoin price has left an enormous wick and tail on the weekly time frame. We use a saying at TRI, “wicks and tails like to be eaten”. This phrase means the price likes to explore those wicks and tails and fill them in with price action.
So Bitcoin could range between this area for a while before deciding a direction, washing out the public before setting a base for a push to new highs.
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Last year, we talked a lot about 2023 being a bottoming year, according to the Benner Cycle. Read the full blog on the Benner Cycle here. How The Benner Cycle Predicts 100 Years of Market History”
The next eventful year on the Benner Cycle chart is 2026, which perfectly aligns with the Bitcoin cycle top (2025-2026). According to the Benner Cycle, this will be a good time for high prices and the time to sell Stocks and value of all kinds.
In his video, Larry shared this cycle chart showing how industrial production's ROC (Rate of Change) shows a top in 2025-2026.
If there’s ever a time to get serious about investing in the market, stocks, and crypto, it’s in 2024. We’re through the Benner Cycle bottom year and well into the decade. As Larry Williams mentions, this may be the last runaway bull market.
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