Dow Jones – Amazing Bull Charge

Dow Jones total return index

Dow Jones Returns

From the level of sub one thousand in 1971, DJX has recorded its record high of 14000 and on eleven Oct 2007. To explain DJX has racked up around 13000 points in 38 years, or put it bloomed fourteen times.

That’s a mean yearly return of 36.% which isn’t bad at all. In this journey northwards there’s been some major corrections. Leaving aside a fast and heavy dip in 1988, DJX has given overall good returns to its long-term financiers until year 2000. Then in year 2000 it started its tumble and lost just about 5000 points in three years, scaring the wits out of stockholders with all pervasive climate of gloom and doom.

Just when people thought everything was lost, DJX again picked itself up and nearly did an encore of 1995 bull run in next 5 years. From year 2003 to 2008 DJX repeated its stellar performance of period 1995-2000. No earlier did the five year period of joy for bulls got over that we became spectators to one of the worst mauling by bears on Wall Street. In next to no time DJX lost roughly 7800 points.

You can recall the savage agility when you recall this major index on planet earth lost over half its worth in about eighteen months. What devastation that would have caused to millions of speculators !! Since Mar 2009 DJX is on a recovery trail. Actually it has recovered just about fifty pc of lost ground. Now the query that begs our attention is whether DJX is finally out of the woods or not. I’m presenting some pointers that might help you to choose for yourself:

* Last correction of year 2k lasted three years and we have finished only two years since this correction commenced in Oct 2007.

* Bottoming out process is usually a long drawnout affair for such a vicious fall. That indicates some more time might be required for DJX to eventually recover and surge ahead for another bull charge.

* Already news flow is turning negative in US, showing ugly signals of loss in confidence information.

* Fifty percent pullback to the bear phase means DJX should reach 10360, which it just about has. So one can look forward to a fall from level of 10500.

In all possibility history want to repeat itself. So you can say that Dow may take another year to absolutely get over the bear mauling. Until that time I assume we should be prepared to witness another session of selling that might take DJX down to 6500 level and perhaps even lower. In the best of conditions expect DJX to touch at least 8500 level in coming months.

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