Crashes & Crises after January

Stocks post their first negative January performance since 2010. Declines in January have more commonly involved high-risk declines during the in the year – but not necessarily a decline for the rest of the year as the “January Barometer” suggests with its 73% accuracy. Here's a look at equities, using the Dow Jones Industrials index. 2010 – The last time stocks fell in January (-3.5% due to Volcker PropTrading speech) — Eurozone crisis kicked off and the May Flash Crash hit partly due to (GS DoJ investigation). 2000 – The bust of the dotcombust was kicked off by a 7% decline in January. 1998 – Another year of spectacular losses when the Asian currency crises coincided with damage in Russia and Brazil, a classic case of emerging markets collapse. 1990 – The year of the US Savings & Loans crisis and Saddam Hussein's invasion of Kuwait started off with a 6% January fall before leading to a 17% decline in Aug-Nov.

We expect the current downleg will stabilize near 1700 for the S&P500 and 15300 for the DJIA, coinciding with stabilization at 2.45% for 10-year yields.