Question

In: Statistics and Probability

Many investors believe that the stock market’s directional change in January signals the market’s direction for...

Many investors believe that the stock market’s directional change in January signals the market’s direction for the remainder of the year. This so-called “January Indicator” is frequently cited in the popular press. But is this indicator valid? The accompanying table summarized the relevant changes in the Dow Jones Industrial Average for the period December 31st, 1927 to January 31st, 1981. Based on your analysis, do the data appear to confirm the validity of the January indicator?

                          Next 11 month change

                          Up                  Down

               

               Up        25                  10

January change

               Down      9                    9

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orchestra answered 2 years ago
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