(FORTUNE Magazine) – Investors, wondering whether to buy or sell? Yale Hirsch, who publishes Smart Money, an Old Tappan, New Jersey, newsletter, and the annual Stock Trader's Almanac, says the answer may lie in how Standard & Poor's 500 index performed in January. In 34 of the last 41 years, he says, the S&P ended the year pointing in the same direction that it took in the first month. In other words, when the market was up in January, it was up for the year, and vice versa. One explanation, according to Hirsch: A lot of activities affecting the markets are scheduled in the beginning of the year. He points especially to such government actions as the presentation of the federal budget. In the past four decades the January Barometer, as Hirsch calls it, has never pointed in the wrong direction in odd-numbered years like this one when a new Congress meets. So just how useful is all this? It varies. Even when the barometer is right, the degree of market movement for the whole year varies greatly. In 1990 the S&P fell 6.9% in January and was down 6.6% for the year. But in 1955, January's mere 1.8% rise foreshadowed a huge 26% gain. When the indicator was wrong, it could be very wrong. In 1966 the market rose 0.5% in January, but it ended the year down 13%.

Still, the barometer does seem to be something more than a fluke. David Hildebrand, a professor of statistics at the Wharton School, says the odds of this phenomenon occurring by chance are at most 1 in 40.

CHART: NOT AVAILABLE CREDIT: SOURCE: THE HIRSCH ORGANIZATION CAPTION: JANUARY AS ANNUAL S&P BAROMETER: 34 HITS, 7 MISSES