NVentures January Trifecta

A comprehensive implementation of the January Trifecta methodology, combining three proven seasonal indicators into a unified scoring system with institutional context layers.


🎯 WHAT THIS INDICATOR DOES

This indicator tracks and scores three well-documented January seasonality patterns that have historically predicted full-year market direction:

• Santa Claus Rally — Measures performance during the last 5 trading days of December + first 2 trading days of January. This 7-day window has shown a historical tendency toward positive returns. When it fails significantly, it often warns of trouble ahead.
  
• First Five Days — Tracks the first 5 trading days of January. Historically, when these days show gains ≥2%, full-year returns have been positive with high consistency.
  
• January Barometer — "As January goes, so goes the year" - This classic market adage tracks full-month January performance as a predictor for the remaining 11 months.
  

⚙️ HOW IT WORKS

Trifecta Scoring (0-3):
Each component adds +1 to the score when positive:

• Santa Rally > 0% → +1
  
• First Five Days > 0% → +1
  
• January Barometer > 0% → +1
  

Context Layer Scoring (0-3):
Additional confirmation signals:

• Price above 200-day MA → +1 (trend confirmation)
  
• YTD performance positive → +1 (momentum)
  
• Prior year was negative + Trifecta bullish → +1 (mean reversion multiplier)
  

Total Score: 0-6 points combining both layers for a complete market regime assessment.


📊 UNIQUE FEATURES

What sets this implementation apart from basic seasonal indicators:

• Real-Time Dashboard — Live tracking of all three components with status updates, return percentages, and completion states. No manual calculations needed.
  
• Automatic Trading Day Counting — Correctly counts actual trading days (not calendar days) for accurate window detection across all markets.
  
• Context Layer Integration — Goes beyond the basic trifecta by adding trend regime (200 MA), momentum (YTD), and mean-reversion context (prior year performance).
  
• Post-Bear Market Detection — Automatically identifies when a 3/3 bullish trifecta follows a negative prior year - historically the highest conviction setup.
  
• Visual Zones — Background highlighting shows when Santa Rally and First Five Days windows are active.
  
• Multi-Index Support — Optimized display for S&P 500, NASDAQ 100, Dow Jones, Russell 2000, and DAX with automatic instrument detection.
  
• Configurable Alerts — Set alerts for Santa failures, trifecta completion, and special high-conviction signals.
  

📈 HISTORICAL CONTEXT (S&P 500, 1950-2024)

The January indicators have been documented in the Stock Trader's Almanac and studied extensively:

• Trifecta 3/3 Bullish: ~90% of years saw positive full-year returns
  
• Post-Bear Trifecta: When 3/3 bullish follows a down year, historical accuracy has been exceptionally high
  
• Santa Failure Warning: Significant Santa declines have often preceded challenging years
  
• First Five ≥2%: Strong early January gains have correlated with positive years
  

Base Rate Reminder: US equity markets have been positive approximately 70% of all years regardless of January signals. Always consider this when interpreting results.


🔧 HOW TO USE

1. Apply to DAILY timeframe (required for accurate calculations)
   
2. Best used on major indices (SPX, NDX, DJI, RUT, DAX)
   
3. Monitor dashboard during late December through January
   
4. Watch for component completion and score updates
   
5. Use context layer for additional confirmation
   
6. Consider setting alerts for key signals
   

Settings:

• First 5 Days Threshold: Adjust the "strong signal" percentage (default 2%)
  
• Show/hide 200 MA and YTD reference lines
  
• Dashboard position and size customization
  
• Alert toggles for different signal types
  

⚠️ IMPORTANT DISCLAIMERS

• Historical statistics are based on S&P 500 data and may not apply equally to other instruments
  
• Past performance does not guarantee future results
  
• Seasonal patterns can and do fail — always use proper risk management
  
• This indicator is for informational purposes and does not constitute financial advice
  
• Always combine with other analysis methods and your own due diligence
  

📚 METHODOLOGY CREDITS

The January Trifecta concept builds on seasonal market research popularized through the Stock Trader's Almanac. The individual components (Santa Claus Rally, First Five Days, January Barometer) are well-established in market literature.

This implementation adds original features including the dual-layer scoring system, context integration, real-time tracking dashboard, and automated signal detection.


NVentures. Unconventional Alpha.