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THEORETICAL TRADING OF THE DJIA USING MY DAY-CYCLE, NIGHT-CYCLE YEARS AS ENTRY AND EXIT POINTS

Sep. 23, 2014 5:26 PM ET
Michael Clark profile picture
Michael Clark's Blog
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I don't know if I have ever shown the reader this.

TRADING THE DJIA USING MY DAY-CYCLE AND NIGHT-CYCLE DATES AS ENTRY- AND EXIT-POINTS, A HISTORICAL STUDY.

This also shows why I am expecting another strong sell-off or two in the markets before the end of 2019.

Go back in history and see how the markets perform during my designated Day-Cycles and Night Cycles. You might be surprised by the results. Markets seem to move sideways during Night-Cycles, as if they are resting. During Day-Cycles, markets fly off the charts.

The Dow Jones Industrials return:

During the three Day-Cycles during the Twentieth Century, buying the Dow Jones Industrial Average would have given approximately these returns:

Day Cycles • Points • Average Gain • Annual Average Gain
1911-1929 • 268 • 424% • 24%
1947-1965 • 678.7 • 386% •22%
1983-2001 • 9559.52 • 915% • 51%

Totals • 3502.073 • 1725% • 97%
Totals:

During the two Night-Cycles (that have been completed) during the Twentieth Century, buying the Dow Jones Industrial Average would have given approximately these returns:

Night Cycles • Points • Average Gain • Annual Average Gain
1929-1947 • -155.99 • -47% • -3%
1965-1983 • 190.71 • 22% • 1%
2001-2019 • TBD • TBD • TBD in 2019

Totals: 17.36 • -25% • -2%

STOCK MARKET RETURNS

1911 DJIA @ 63.23 - 1929 DJIA @ 331.65: DAY-CYCLE GROWTH OR INFLATION: Positive 268 points, or 424% +24% per year.

1929 DJIA @ 331.65 - 1947 DJIA @ 175.66: NIGHT-CYCLE DECONSTRUCTION OR DEFLATION: Negative 155.99 points or -47% : -3% per year.

1947 DJIA @ 175.66 - 1965 DJIA @ 854.36: DAY-CYCLE GROWTH OR INFLATION: Positive 678.7 points, or 386% : +22% per year.

1965 DJIA @ 854.36 - 1983 DJIA @ 1045.07: NIGHT-CYCLE DECONSTRUCTION OR DEFLATION: Positive 190.71 points, or +22%: +1% per year.

1985 DJIA @ 1045.07 - 2001 DJIA @ 10,604.59: DAY-CYCLE GROWTH OR INFLATION: Positive 9559.52 points, or +915%: +51% per year

2001** DJIA @ 10,604.59 - 2019: NIGHT-CYCLE DECONSTRUCTION OR DEFLATION: still to be determined in 2019.

The current Night-Cycle is a question mark, because of FED inflation policies. This is why I think we will still incur more major selling before 2019. Never in history, before 1987, did the FED see it as its responsibility to keep stock prices from correcting. I am not sure this is part of the legitimate FED charter. I am also not sure this new policy will be legitimated if the FED gamble backfires, which I believe it will.

Best trading.

Michael J. Clark, CGTS

Eugene, OR

23 September 2014

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