When new all-time DJIA closing highs dwindle, then it is time to worry By Almanac Trader
* December 9, 2016
Prior to Dow Jones Industrial Average’s November 10th close it had been just 87 calendar days without a new all-time DJIA high. DJIA’s previous record high close was on August 15, 2016. Historically, this is a relatively brief period of time as DJIA went 3,583 days from January 11, 1973 until November 3, 1982 without a new all-time high. Even that dry spell palls in comparison to the 9,212 day stretch (25+ years) following DJIA’s peak on September 3, 1929. Historically, new all-time highs have been bullish and generally result in additional new highs. When new DJIA record highs begin to arrive less frequently, then it may be time for caution and/or concern. Generally, the longer DJIA goes without a new record high close, the worse its performance has been historically.
For the chart above, we thinned out the 951 previous all-time highs to include just those that came at the end of a streak of new highs based upon the number of calendar days before DJIA reached the next new all-time high close. Three groups were created, 30-, 60- and greater than 90-days till the next new all-time high. In this case the longer DJIA went without a new all-time high, the greater the average loss was.
December option expiration week generally bullish By Almanac Trader
* December 9, 2016
December’s option expiration has a bullish history. In fact, the week of options expiration and the week after have the most bullish record of all Triple Witching expirations (page 78, Stock Trader’s Almanac 2017). However, the record is not pristine. In 2011, Europe’s debt crisis derailed the market. In 2012, the threat of going over the fiscal cliff triggered a nearly 2% loss the week after. Last year, Fed rate jitters resulted in a mild decline for the week, but losses were quickly recovered in the week after.
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