When December Low is Crossed & January Barometer Negative - from Traders' Almanac

Of the 31 times since 1950 where the Dow closed below its December Closing low in the subsequent Q1 it declined further 29 times or 93.5% of the time. Both years, 1996 and 2006, that the Dow did not fall further the January Barometer was positive.

The 29 subsequent drops averaged 11.8% (not including 1996 and 2006). Average time frame is 152 days with a minimum of 2 days in 1991 (Schwarzkopf and Powell Beat Saddam) and a max of 345 days in 1969 (Summer of Love, Woodstock, followed by Vietnam escalation and Kent State in 1970 with bear market continuing to May 1970). 2008 was the worst drop – 42.1% over 323 days. Four occurred in less than 14 days and 13 in less than 90 days. 23 crosses occurred in January, 3 in February, 5 in March.

When both the December Low is breached and the January Barometer is negative only 1956 was spared a further decline as Ike's heart condition improved, though the market was flat for the year. In these years the S&P 500 hit the low for the year on average about six months later for an average drop of -14.2%.