The start of 2022 suggests a good year for Energy and Value (by SentimenTrader)

The dollar loses its medium-term trend

A well-known seasonal pattern, originated by Stock Trader's Almanac, suggests that how investors behave in the first 5 days of a new year sets the tone for the rest of the year.

In theory, this is silly. There is no reason why such a short-term move would have any impact on returns nearly 12 months later. In practice, it's not so easy to dismiss.

Instead of rehashing the familiar, let's look at sectors and factors and see if there is any reason to be especially bullish or bearish on their prospects for the rest of this month and this year depending on how they were treated during that first week. Based on that theory, things are looking good for Energy, Financial, and Value stocks. High-beta investors might have a reason to worry.

When we look at how first-week winners performed for the rest of the month and the rest of the year, the results were good. 

Taking first place was Energy, which added to its gains during the rest of the month only 52% of the time, but during the other approximately 247 other days in the year, it rose a whopping 90% of the time.