Market Overview

Why History Says Dow Jones May Not Fall This Autumn (CAT, KO, GE)

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The Dow Jones Industrial Average (DJIA) is due for a slide in the next few months, if recent history is any indication. The Dow Industrials have declined sharply eleven out of the past thirteen Autumns, from 1997 through 2009. Only 2006 and last year saw autumns without significant retreats.

According to www.safehaven.com, "Seven of the eleven declines were stock market crashes, with declines greater than 15 percent, and an eighth was nearly a crash, plunging 13.2 percent!"

The declines typically started in the July to September period and lasted into November. Ten of the eleven significant declines were occurring over the autumn equinox, and all but one declined during the month of September.

This could be strong support for the bull case, because September has seen most stocks gain. The DJIA and S&P 500 are both up for the month, and Dow components like Caterpillar (NYSE: CAT), Coca Cola (NYSE: KO), and General Electric (NYSE: GE) continue to push higher.

If an autumn decline hasn't started yet, then statistically the chances of a stock slide are considerably smaller. It appears that bulls will continue to control this market until there is news scary enough to send investors fleeing.

Posted-In: www.safehaven.comBroad U.S. Equity ETFs Short Ideas Intraday Update Trading Ideas ETFs

 

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