Lame Duck

There would be no January Barometer without the passage in 1933 of the Twentieth "Lame Duck" Amendment to the Constitution. Since then, it has essentially been "As January goes, so goes the year." January's direction has correctly forecasted the major trend for the market in most of the subsequent years.

Prior to 1934, newly elected Senators and Representatives did not take office until December of the following year, 13 months later (except when new Presidents were inaugurated). Defeated Congressmen stayed in Congress for all of the following session. They were known as "lame ducks."

Since 1934, Congress convenes in the first week of January and includes those members newly elected the previous November. Inauguration Day was also moved up from March 4 to January 20. As a result, several events have been squeezed into January, which affect our economy and our stock market and quite possibly those of many nations of the world.

The basis for January's predictive capacity comes from the fact that so many important events occur in the month: A new Congress convenes, and the President gives the State of the Union address, presents the annual budget, and sets national goals and priorities. Switch these events to any other month and chances are the January Barometer would become a memory.

View the January Barometer compared to "New Congress Barometers."

New Congress Barometers Prior to 1933 "Lame Duck" Amendment (Odd Years)


NEWLY ELECTED PRESIDENT INAUGURATED MARCH 4TH
March 12 Month's    
% Change % Change Same Opposite
5.2 11.6 1909  
0.7 2.4 1913  
1.0 14.0 1921  
-2.7 -14.6 1929  
7.8 101.3 1933  
12 month's % change includes March


NEW CONGRESS CONVENES FIRST WEEK IN DECEMBER 13 MONTHS AFTER ELECTION
November 12 Month's    
% Change % Change Same Opposite
0.9 2.5 1901  
-1.8 39.7   1903*
7.3 10.9 1905  
1.2 4.3 1907  
0.7 8.9 1915  
4.3 17.5 1923  
3.5 3.9 1925  
9.1 38.8 1927  
-11.0 -41.3 1931  
*Panic of 1903 ends 11/9 as Congress convenes (off 37.7%)
12 month's % change includes November


NEW CONGRESS CONVENES IN APRIL OR MAY EARLIER THAN USUAL, NO CHANGE IN PRESIDENCY
November 12 Month's    
% Change % Change Same Opposite
0.5 6.0 1911  
-2.3 -19.6 1917  
13.6 0.7 1919**  
** Wilson in Europe 6 months; Post-Armistice surge (up 30.9% Feb to May)
12 month's % change includes applicable month