Wednesday, July 29, 2009
Today's chart is actually completely unorginial, I borrowed it from bloomberg.com. I hope they don't mind. Aparently, the Dow Jones has only rallied from being down 10% to being up 10% from it's 200 dma a few times in the last century. Since 1921, the Dow Jones has done this only 21 one times but they have all led to profits over the following 12 months for an average of 18%. The chart above shows the last four times this has happened. I guess we can officially put this signal to the test starting July 2009! Again, I got this chart from here and this link has more detailed information.