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Post date: 08/21/2015 - 10:02

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"Drought" Surrounding Last Stock Market High

Is "Something To Worry About"

Submitted by Tyler Durden on 08/20/2015 09:20 -0400

Dow Jones Industrial Average

6

Via Dana Lyons' Tumblr,.

50-day “droughts” before and after a 52-week

high in the Dow Jones Industrial Average have

marked several major tops.

It has now been 64 days since the last 52-week high in the

Dow Jones Industrial Average (DJIA) on May 19. While that

may seem like an eternity in the context of the past 2.5 years, it’s

not at all unusual in the grand scheme of things. However, what

did have us thinking “hmmm” is the fact that there was also an

extended period of time – 53 days to be exact – prior to the DJIA’s

high on May 18 when the index was unable to score a new high. As

it turns out, such droughts prior to and subsequent to a DJIA 52-

week high have been unusual. And, as it turns out, such

occurrences have often come at inauspicious times in the

market cycle.

Specifically, we looked at times when the Dow Jones Industrial

Average made 1 or more new 52-week highs within a 7-day

span – but no other 52-week highs during the 50 days

preceding or following that 7-day span. As it turns out, the

current instance is one of 11 unique examples going back to 1960.

A glance at the dates (dots) on the chart tell you that several of

the occurrences came near tops in the DJIA of some significance,

including the last 2 cyclical tops. These are the months

encompassing all unique signals since 1960:

• January 1960: Intermediate-term top, held for 14 months

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of 5"Drought" Surrounding Last Stock Market High Is "Something To Worry About" | Ze...

22/08/2015http://www.zerohedge.com/news/2015-08-20/drought-surrounding-last-stock-market-...

Tweet 62

• May 1967

• August 1972: Preceded cyclical top by 4 months, which

held for 10 years

• July 1976: See next line

• September 1976: Cyclical top, held for 5 years

• February 1980

• October 1988

• January 1990: Intermediate-term top, temporarily

surpassed during the summer but otherwise held for 13

months

• May 2001: Cyclical top, held for 5 years

• October 2007: Cyclical top, held for 5.5 years

• May 2015: ?

As you can see, while the record is not unanimously bad, it

certainly does not present a favorable risk/reward proposition. In

total, here is the performance of the DJIA following all occurrences.

You can see the negative manifestation of the timing of these

events the further out you go on the return table. FYI, the return

figures are calculated as of 50 days following the last 52-week high

(in our present situation, that would be from July 30, i.e., 50 days

after May 19).

Is this development – a 50-day drought before and after the

DJIA’s last 52-week high – something to worry about?

According to many of the prior occurrences, the answer is

“yes”, particularly on a longer-term time frame. As there are

only 10 other occurrences over the past 55 years with which to

judge, some may argue the historical proximity of many of the

occurrences near significant tops is random, statistically speaking.

That may be the case. However, one can come to their own

conclusion regarding the study. In our view, in combination with

many other concerns out there, this is another red flag for the

longer-term prospects of the equity market.

* * *

More from Dana Lyons, JLFMI and My401kPro.

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Thu, 08/20/2015 - 09:27 | 6446773

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JustObserving

a 50-day drought before and after the DJIA’s last

52-week high – something to worry about?

Technical analysis on a total manipulated, corrupt market is

worthless - more worthless than a 3 dollar bill with Putin's

portrait on it. Or a 100 trillion banknote from Zimbabwe.

BobPaulson

Exactly. It's like the long lost days of buying stocks

based on the company balance sheet and revenues.

No longer valid.

rex-lacrymarum

It never was.

BandGap

Worrying is worthless. Just accept the inevitable.

sgorem

as a very famous philosopher once said, "

What, Me Worry!"..................................

Vampyroteuthis ...

more worthless than a 3 dollar bill with Putin's

portrait on it.

This kind of bill is entertaining and will be worth more than

several FRNs.

ebworthen

Look at that ridiculous ramp up since 1985!

DOW 4,000 would be optimistic!

tarsubil

There is strong support at 8,000 or at 5,000. Let's

not be ridiculous. Haha.

nope-1004

The man claiming these markets are free, Martin

Armstrong, said this today:

China was consuming almost 50% of all commodities so the

contraction there is pushing the emerging markets off the cliff

where we have $9 trillion worth of new debt created since 2007

in dollars. They assumed the trend would never end and then

borrowed in dollars since rate were artificially low.

How can all markets be free, yet at the same time have

"artificially" low rates?

ar·ti·fi·cial adjective

artificial:

1. made or produced by human beings rather than occurring

naturally, typically as a copy of something natural.

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Thu, 08/20/2015 - 09:32 | 6446793

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Armstrong, you are a fraud. You also aren't very intelligent

because you yourself have used words and phrases in your own

writings that show your deception and lies. But since revenue

depends on fooling people and writing about the past and how

your predictions on the past came true (lmao), anyone with a

discerning eye will see it over time. So keep writing.

Brazen Heist

Does the stock market not look like a top to anyone? Its

looks ridiculously inflated. The crash will be spectacular,

or the Fed could try a PBOC, that would be even funnier.

You have been warned. Sell now before they ban selling.

ejmoosa

Why are you guys looking for all of these obscure

"proofs" that there's an issue?

Be patient. The shit is going to hit the fan for the simplest of

all reasons.

The profits earned by these companies are falling and not

rising. Who pays more for lower earnings?

Brazen Heist

Idiots who dwell in a world that's upside down.

sgorem

the fucking goverment through zirp!

Mike Honcho

Thought this was an article on California.

buzzsaw99

mr. yellentine has set the price

Smiddywesson

nm

fowlerja

Is it time to buy the dip now?

Tortuga

So.

The 40 days and nights of no rain in E TX surrendered to

thunder, lightening, and rain today. August is so busted.

Yeehaw.

and

http://theconservativetreehouse.com/2015/08/20/how-all-the-

candidates-fi...

I knew this, viscerraly, but couldn't put it so succintly. The

scum have rallied their eunuchs against America.

I didn't know that about my man Cruz. Very vile, not as vile as

Perry hiring the barbour scum.

Cruz can repent by his un equiviqual support of the the Donald

and Palin.












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