Dow Jones prediction: Soar or Sag?

Dow Jones Prediction

Updated Feb 2023

The best strategy under such conditions is to use sharp pullbacks to open positions in strong companies; the stronger the pullback, the better the opportunity. We can already see signs that 2018 should be a good year for the markets. Individuals waiting for the ideal entry points will be left behind. They will look back at today’s entry points and wish they had bought, just as they did back in 2009, 2015, 2018 and now in 2020. The crowd never learns, they say they want to try something new, but when push comes to shove, they bend over and fall for the same old play. Tactical Investor Jan 2019

The trend is your friend; the rest is just noise

It takes a special kind of stupid to be a Permabear, the one that even a thousand hard slaps will not alter. Perma-Bears have a death wish; they beg to be taken to the cleaners for nothing else can explain this short-sighted thinking. A simple examination of any long-term chart will prove once and for all that being a Permabear is never going to pay off. There is not one long-term chart that can prove that taking a bearish stance has ever paid off in the long run.

One can see that from a long-term perspective, strong corrections or crashes are nothing but buying opportunities in disguise. Buy when blood is flowing freely on the streets and run for your life when the herd turns euphoric.

Dow Jones Prediction: Ready To Roar?

It takes no effort to panic, which is why there is no reward, but it takes effort to remain calm in the face of panic, which is why the rewards are usually very high. Mass Psychology demonstrates that one should never follow the herd as they always do the wrong thing at the right time.

If the market pulls back, it’s a bonus, and this is why we also adopt the stance that when the trend is up; the stronger the deviation, the better the opportunity. Strong pullbacks should be viewed as early Christmas bonuses as the trend is firmly up. Sharp pullbacks can be used to open or add to one’s current positions. Market Update July 24, 2019

The Dow has now dipped below 27K (on a monthly basis), and in doing so, there is a good chance that one of the two outcomes we favour may come to pass:

The Dow drops hard and fast to the 25,500 to 26,000 ranges, the crowd stampedes and, in doing so, creates a lovely long-term opportunity for Tactical Investors
The market pullback a bit and then trends sideways and, in doing so, pushes our indicators into the oversold ranges. Market Update July 31st, 2019 Market Insights: October Stock Market Crash Update

Stock Market Outlook Oct 2019

Copper continues to put in a bullish pattern, and once the MACDs on the monthly charts experience a bullish crossover, we suspect it will not be too long before the markets explode.

According to the alternative Dow Theory, if the Dow utilities trade to new highs, it indicates that the overall market will follow suit sooner than later.

Vast amounts of money have left the market, indicating that the crowd is panicking at precisely the wrong time. History illustrates that the Crowd is never correct over the long run; they experience tiny moments of victory, but these moments dwarf the years of losses they are forced to endure when the markets take off.

Research

Here are a few articles and research papers that discuss the potential benefits of investing in the Dow Jones Industrial Average (DJIA) during times of uncertainty or market crashes:

“Why Investing in the Dow During Market Crashes May Be a Good Strategy” by Wayne Duggan, published on Benzinga.com: This article provides an overview of the historical performance of the DJIA during market crashes and argues that investing in the index during these times can be a smart move. https://www.benzinga.com/trading-ideas/long-ideas/20/04/15823503/why-investing-in-the-dow-during-market-crashes-may-be-a-good-strategy

“Dow Jones Industrial Average Performance During Financial Crises” by W. Scott Frame and Lawrence J. White, published in the Journal of Financial Stability: This research paper examines the performance of the DJIA during financial crises between 1896 and 2010 and finds that the index tends to outperform other market indices during these periods. https://www.sciencedirect.com/science/article/pii/S157230891300032X

“Why the Dow Jones Industrial Average Is a Good Benchmark” by Philip van Doorn, published on MarketWatch.com: This article argues that the DJIA is a useful benchmark for measuring the performance of the overall stock market and provides data to support this claim.https://www.marketwatch.com/story/why-the-dow-jones-industrial-average-is-a-good-benchmark-2016-05-31