This Dow Signal Flashed in March 2009

U.S. stocks have been on fire in 2018

Jan 16, 2018 at 1:54 PM
facebook X logo linkedin


U.S. stocks have been crushing it in 2018, with the major market indexes assailing new heights at a crazy clip, sending stock market inflows and Wall Street optimism skyrocketing. In fact, the Dow Jones Industrial Average (DJI) has already added more than 1,000 points in the first 10 trading sessions of the year, and is pacing for its biggest monthly percentage gain since November 2016. But can the blue-chip stock index maintain this pace, or is a correction on the horizon?

There have been just nine other times in history in which the Dow has soared more than 1,000 points in the span of 10 sessions, the last occurring in late November 2017. There was one signal per year in 2016, 2015, and 2014, but prior to that you'd have to go back to March 2009 -- widely known now as the "bottom" of the financial crisis. The first signal ever occurred in March 2000, per data from Schaeffer's Senior Quantitative Analyst Rocky White.

dow gains 1K points in 10 trading days

Although the average three-month returns are widely skewed by the December 2008 signal, after which the DJI dropped nearly 20% into the aforementioned March 2009 bottom, the data suggests some blue-chip weakness ahead. Three months after previous quick, 1,000-point rallies, the Dow was in the red 75% of the time, averaging a loss of 2.83%.

Even removing the 2008 data, the DJI was down 0.4%, on average, three months later. That's compared to an average anytime gain of 1.38%, with a nearly 64% win rate, looking at data since 2000. Only after the 2009 and 2014 signals was the DJI higher three months out.

In the short term, however, strength could beget strength for the Dow. Two weeks after previous signals, the index was up 1.59%, on average, and higher nearly 89% of the time. That's roughly eight times its average anytime two-week gain of 0.2%, with a win rate under 58%.

Likewise, one month after gaining 1,000 points in 10 sessions, the Dow was up 1.8%, on average, and higher nearly 78% of the time. That's more than three times its average anytime one-month return of 0.45%, with a win rate of 61.31%.

dow after fast 1K rallies vs anytime

 

 

Target Effortless Triple-Digit Gains Every Sunday Evening For Life!

This is your chance to triple your profit potential on Sunday evenings, without spending all your free time watching the market.

On Sundays, as a Weekend Plus subscriber, you’ll get up to 6 trades every Sunday, each targeting gains of 200% or more.

Start targeting gains like the ones our subscribers have seen recently, including:

213.3% GAIN on AutoNation calls
100.0% GAIN on Monster Beverage calls
100.4% GAIN on Walgreens Boots Alliance puts
100.4% GAIN on ON Semiconductor calls
257.7% GAIN on Dell calls

101.0% GAIN on Apollo Global Management calls
103.6% GAIN on JP Morgan  Chase calls
105.3% GAIN on DraftKings calls
101.3% GAIN on Airbnb calls
203.0% GAIN on Shopify calls
102.0% GAIN on Cboe Global Markets calls
100.9% GAIN on Boeing calls
102.1% GAIN on Microsoft puts
102.3% GAIN on First Solar calls
101.5% GAIN on PulteGroup calls
101.0% GAIN on Apple calls
209.4% GAIN on NXP Semiconductors calls
100.8% GAIN on Uber Technologies calls
100.4% GAIN on Academy Sports and Outdoors puts
102.2% GAIN on Trade Desk calls
100.8% GAIN on DoorDash calls
100.0% GAIN on Camping World Holdings puts
100.0% GAIN on Cboe Global Markets calls
100.2% GAIN on C3.ai calls
238.5% GAIN on Oracle calls

 
 
 


 
 

Rainmaker Ads CGI