* Some traders predict a seasonal bounce when institutions resume buying in January, after cleaning up their portfolios in the last quarter.
* Some traders are optimistic that stocks would get a seasonal December bounce as the "tax-loss" selling period for institutional investors is in place. Institutional fund managers typically close their books toward the year's end. So, in order to offset the profits with the losses in their clients' portfolios, they sell their high-cost poor-performing stocks in November and buy back some of these stocks toward the end of December and in January, after a stipulated 30-day waiting period. That strategy tends to create what some analysts call the "January effect," in which institutional buying at the beginning of the year drives up stocks.
* Another first month market predictive tool is the so-called January Barometer, which looks at the entire month's market performance. Basically, the theory goes, if the market is up in January, it will be an up year. If the market falls in January, look out below. Amazing accuracy or coincidence? * The January Barometer has had an even better record than the first five-day method. Since 1950, there have been only four significant errors. This does not include six years when the market was essentially flat, in a range between down 5 percent and up 5 percent for the year. ======================================= http://www.australiansharetrading.com/ the complete online resouse for share trading Please use this aricle, you have my prior consent to do so, just don't change a thing.australian share trading By Nik Halik => http://www.australiansharetrading.com offers share trading news ===========================================
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