The Performance of the Dow Industrials in Years that End ...
The Performance of the Dow Industrials in Years that End in “0”
By Robert McHugh, Ph.D.
January 5th, 2010
It is fun, interesting, and informative to evaluate the prospects for the coming year based upon historic cyclical trends. For some bizarre reason, likely to do with market participant psychology, years that end in the same number tend to perform similarly in each decade they occur. Since this year is 2010, a year ending in “0” that occurs only once a decade, we thought it would be interesting to go back over the past century and see how the Dow Industrials performed during the “0” year of each decade.
What we discovered was there is a clear trend, and the trend is negative. Starting in the year 1900, through 2000, ten of the eleven years saw a price decline greater than 12 percent from the opening balance the first day of the year to the low for the year. In six of the years, the decline was greater than 20 percent. In nine of the eleven years, the decline was 14.85 percent or greater, in other words, essentially, nine of the eleven years saw a stock market crash. A tenth year saw a decline of nearly 13 percent. Only 1950 failed to produce a dramatic decline.
Many of the indicators and patterns we follow are warning that 2010 should see the start of a significant decline. This year ending in “0” study supports the indicator and patterns forecast for 2010. Here is the data:
| | Dow Jones Industrials Performance in the Year '00 |
|Year |Intra Year |Intra Year |Year |% Decline
Year Open | |Year |Open Price |Low Price |Low Date |Close Price | To Intra Year Low | | | | | | | | |1900 |66.61 |52.96 |9/24/1900 |70.71 |20.49% | | | | | | | | |1910 |98.34 |73.62 |7/26/1910 |81.36 |25.14% | | | | | | | | |1920 |108.76 |66.75 |12/21/1920 |71.95 |38.63% | | | | | | | | |1930 |248.48 |154.45 |12/17/1930 |164.58 |37.84% | | | | | | | | |1940 |150.45 |110.41 |6/10/1940 |131.13 |26.61% | | | | | | | | |1950 |200.13 |193.94 |1/13/1950 |235.42 |3.09% | | | | | | | | |1960 |679.36 |564.23 |10/25/1960 |615.89 |16.95% | | | | | | | | |1970 |800.36 |627.46 |5/26/1970 |838.92 |21.60% | | | | | | | | |1980 |838.74 |729.95 |3/27/1980 |963.99 |12.97% | | | | | | | | |1990 |2753.2 |2344.31 |10/11/1990 |2633.66 |14.85% | | | | | | | | |2000 |11501.85 |9571.4 |10/18/2000 |10787.99 |16.78% | |
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