Happy New Year, everybody, though the market sure didn't do anything to help us get 2014 started on an encouraging foot. The S&P 500 closed down about 0.8%. Yikes. If you're looking for a reason or a prompt for the pullback, don't bother - there wasn't any substantive news or any kind of economic catalyst to spark the selloff. The most reasonable explanation is, traders were waiting until today to sell so they wouldn't have to deal with the tax consequences when filing 2013's tax returns. Whatever gains or losses were booked today won't be a factor until tax-filing time in 2015. The reason, however, is irrelevant. What we really need to be concerned with is the fact that it happened without a second thought. What happened to all the buying interest that was so pervasive just a few days ago? Maybe things weren't so red hot after all. Here's the thing - before anybody starts jumping to conclusions based on one day's action, let's give the bulls a chance to regroup here. The market was overbought as of last Tuesday regardless of the calendar, and we were due for a dip. We can't freak out now that we're starting to pay the piper. This thing could be over by tomorrow morning. On that note... The S&P 500 has a ton of support waiting for it around 1812. That's where the index found a ceiling several times in November and December (ceilings have a tendency to turn into a floor), and that's where the 20-day moving average line will be by the time it could be tested. Until and unless that level is broken, then this selling effort is absolutely nothing to worry about yet. Beyond that, I've got a feeling the 50-day moving average line (purple) currently at 1792 - and rising fast - is also a floor just waiting to move into place. You can look back to December and see how it only took a brush of the 50-day line to rekindle the rally. Again though, let's worry about that when the time comes. I'm still not convinced this weakness is going to go anywhere. With all of that being said, I suppose I would be amiss if I didn't tell you the stats of the so-called January effect now that we're into January. I'll go ahead and tell you now that I'm only a half-hearted fan of turning the averages and tendencies into a trading strategy. More often than not the averages are a happy medium of some extreme numbers, which are great when you're on the right side of the assumption, but can be miserable if you're on the wrong side of the table. Case in point: The average January return is a mere 0.95%. But, when January doles out a loss, the average loss is a dip of 3.95%. On the other end of the spectrum, the average gain when January is a winner is a solid 4.1% advance. That's good, but there's only a 60% chance of making a gain - any gain - in January. That's not a healthy risk-versus-reward scenario. The irony? The odds of the market actually achieving a 0.95% gain this month are actually very slim. It'll probably be much worse or much better. Anyway, there are two January-based theories to consider. One of them is an assumption about the full-year's performance based on January's total return. The other is an assumption about the full-year return based on the performance of just the first few days of the month. As for the full-month theory, the premise is simple - if January is a winner, then so too will be the year. The long-term track record of this idea is great, holding true about 89% of the time. Only seven times in the past 64 years has a bullish January not set up a bullish year. Problem: Four of the seven failures have occurred since 2000, suggesting the effectiveness of the theory is deteriorating over time. Makes sense. The more people that know about a tendency, the less effective it becomes. My only problem with the premise is that the market is supposed to go up over time, so to see a bullish January kick off a bullish year isn't exactly a stretch for stocks. In fact, the idea doesn't even work all that well as a bearish-prediction tool. Only about half of the bearish Januarys in modern history have properly predicted a bearish year. The other January effect theory says, however the first five trading days of January turn out is an indication of what the whole year's going to look like. That's why it's also called the "First Five Days" effect. Whatever you want to call it, it works, though not as well. Going back well over 100 years, the market only saw a yearly gain 68% of the time the first five days were bullish. Conversely, stocks only fell 58% of the time the first five trading days of the year were bearish. That's better than tossing a coin, I suppose, but not a lot better. Either way, you don't need me to tell you the market's not off to a great start in terms of setting a bullish tone early on in the year. This is going to make things quite interesting through this coming Wednesday. By the way, I caught a couple of write-ups at the site today I think you'll want to take a look at. One of them is John Udovich's thorough look at Advanced Micro Devices (AMD), and how it ended 2013 and is heading into 2014. The other one is Bryan Murphy's look at Venaxis (APPY). Only read it if you're looking for some straight-up trading action and don't care about the underlying fundamentals... though the story is still an interesting one. Be sure to check back tomorrow. That's when the market's overall story is going to get real interesting.