A Positive TSX January Effect:

The January Effect is the bullish tendency of the smaller companies (the Russell 2000) to out perform the large companies (the Dow or the S&P500) during the month of January. This important signal – thanks to the Stock Trader’s Almanac – is somewhat based on bullish investors biding up the economy sensitive smaller companies as we begin the New Year.

When the study is applied to our own TSX our chart displays a bullish January Effect in Canada (so far) – which means the S&P/TSX Small Cap is out performing the large cap S&P/TSX60 index through January 24 as measured by a simple spread. The TSX Small Cap index is typically reflects the performance of the smaller and risky energy, materials and industrials – such as biotech, technology, mining and oil & gas producers.