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Historical DJIA facts of 1997:well 1997 brought us a couple of
historical events that were previously unmatched and uncharted on the
DOW. Closings on the DJIA, for your information never in the past has
there been greater than 5 consecutive + closing years on the DJIA untill
now! the years of 1991/92/93/94/95/96/97 is the very first time in the
history of the DJIA this has happened. 1996 positive closing gave us the
first time for 6 consecutive +closings.Twice before there were periods
of 5 consecutive years of positive closings, those being 1924thru1928
and 1985thru1989. Thusly by1997 also closing,in positive territory,
history was further extended to a record number of 7 continuous years of
+ closes!. Time to consider 7 year negative timing?For the first time in
the history of the DJIA,1997 brought about the first time ever for the
DJIA to have 3 continuious years of 20%+ gains. 1995 was
+33.5%,1996 was+26.01% ,1997 was+22.64%.Following years after 2
consecutive years of 20% gains.the djia in its history, since 1897 (not
1890-1896 na) has had two consectutive years of greater than 20%
closing gains 7 times the third years performance is as
follows:1899+9.2%,1906-1.9%,1926+0.3%,1929-17.2%,1937-32.8%,1955+2.3%,and1987+2.3%
note:1995+33.5%,1996+26% and1997+22.64% will be the 8th time in
the history of the djia for this to occur, and the first time for 3
consecutive years of greater than +20%gains.Thirdly i would like to add
that the DJIA also had its composite changed on Marrch 17th.Dow Jones
& Co. dropped four stocks from the index and added four others to
increase representation of the technology, finance and health care
sectors. Joining the Dow was Travelers Group Inc., Hewlett-Packard
Co., Johnson & Johnson and Wal-Mart Stores Inc. They will replace
Westinghouse Electric Corp., Texaco Inc., Bethlehem Steel Corp. and
Woolworth Corp. Westinghouse, Bethlehem and Woolworth were
original Dow components.The market rises more often about 61% of the
time on the second trading day of the month than on any other a period
of 5 consectutive trading days that distinctly outperform the other days
of the month. it is the last trading day of the month and the first 4
trading
days of the next month. in a 398month study 1952-1985 the market was
bullish 58% of the time as compared to 50% for the remaining 16
trading days.investors should beware of a weak jan.after a strong dec.
it
has very negative implications. such ominious action was seen most
reciently in 1990 and earlier in 1960,1962,1973,and1977 ,all bad
market years the first week in jan. reqiures special attention.annual
highs
have been registered 9 times since 1890 in the opening week and
annual,lows 10 times-a rare consentration of major reversals. Will add
this though. since 1890 the market has advanced 65 times in january and
continued for a yearly gain 47 times. 36 jan.declines have led to
bearish
years 23 times giving the months bull/bear indicator a forecasting
record
of 70% of the combined 31 month-to -month divergences, only 9 have
occured since the end of ww2.On the basis of the decinnial record,expect
the decade's high to be in 1997 or 1999.Over the past century the Dow's
decade peaks have been recorded in the following late
years:1899,1907,1919,1929,1937,1946,1959,1966,and 1989. The S&P
500 and the NYSE index made their decade highs in 1968, not 1966.The
1973 Dow was the notable exeption, but not for the market. Most of the
broad-based stocks indices registered their 10 year tops in 1979.Expect
1999 to be a double strong "sell"year. Not only will it mark a decade's
turn,with the anticipated usual hype like the alliterate "Soaring
Sixties"but the applause for the oppertunities in the twentyfirst
century
willhave reached deafing porportions by that time.Industrial stock
prices
witnessed a major peak just before the beginnings of the twentieth
century, topping in September of 1899.George Lindsay's long term
timing studies, origionally published in the "George Lindsay Opinion"
and updated in the mid 1980's by "the advisor"call for an important top
in the fall of 1997, and second,a possible superior hihg in 1999. From a
fundimental standpoint, portfolio'sshould be liqudated if the DOW
JONES price-earnings(PE) ratio approaches 20 times earnings in a
maturing advance.In depression troughs and recovery periods, a high
ratio is not a valid danger signal.The last time the Dow's PE ratio
moved
into never-never land was in the summer of 1987, a lovely time for a
farwell to equities. At the August peak, the Dow had ballooned to 21.6
timestrailing earnings. In December 1961 a record was established which
still stands, the Dow reached 22.9 times earnings:a seven-month bear
panic was about to begin. In the end of the 1950's, the ratio was19.8
and
trouble lay just a week away..In 1937, the market turned down from a
19.3 reading and in 1929 from 19.1. Twenty times earnings, history
proves to be too rich a price for the Dow. Currently today it stands at
20.6 as of 12/31/97.Twelve month hi is 22.4 on 8/6/97 twelve month
low is 18.0 on 4/11/97.5 year hi is 29.9 on 12/28/92 and 5 year low is
13.7 on 10/26/95. current dividend yield of DJIA is 1.76% 12 month
high is 2.10% on 12/31/96 ,12 month low is 1.60% 8/6/97. 5 year hi/lo
is 3.21% on 1/20/93 and 1.60% on 8/6/97. historically a dividend yield
below 3.00% has resulted on a market correction of greater than 35%.
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