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Investor Education
Market Return After Exceptional Years
Dollar Cost Averaging Tool
Dow Theory: The Formation of a Line
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Golden Cross – How Golden Is It?
Debunked – Death Cross
Work Smart, Not Hard
Charles H. Dow, Father of Value Investing
It's All About the Dividends
Dow Theory: Buying in Scales
How to Avoid Losses
When Dividends are Canceled
Cyclical and Secular Markets
Inflation Proof Myth
What is Fair Value?
Issues with P-E Ratios
Beware of Gold Dividends
Gold Standard Myth
Lagging Gold Stocks?
No Sophisticated Investors
Dollar down, Gold up?
Problems with Market Share
Aim for Annualized Returns
Anatomy of Bear Market Trade
Don’t Use Stop Orders
How to Value Earnings
Low Yields, Big Gains
Set Limits, Gain More
Ex-Dividend Dates -
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Historical Data
1290-1950: Price Index
1670-2012: Inflation Rate
1790-1947: Wholesale Price Cycle
1795-1973: Real Estate Cycle
1800-1965: U.S. Yields
1834-1928: U.S. Stock Index
1835-2019: Booms and Busts
1846-1895: Gold/Silver Value
1853-2019: Recession/Depression Index
1860-1907: Most Active Stock Average
1870-2033: Real Estate Cycles
1871-2020: Market Dividend Yield
1875-1940: St. Louis Rents
1876-1934: Credit-New Dwellings
1896-1925: Inflation-Stocks
1897-2019: Sentiment Index
1900-1903: Dow Theory
1900-1923: Cigars and Cigarettes
1900-2019: Silver/Dow Ratio
1901-2019: YoY DJIA
1903-1907: Dow Theory
1906-1932: Barron's Averages
1907-1910: Dow Theory
1910-1913: Dow Theory
1910-1936: U.S. Real Estate
1910-2016: Union Pacific Corp.
1914-2012: Fed/GDP Ratio
1919-1934: Barron's Industrial Production
1920-1940: Homestake Mining
1921-1939: US Realty
1922-1930: Discount Rate
1924-2001: Gold/Silver Stocks
1927-1937: Borden Co.
1927-1937: National Dairy Products
1927-1937: Union Carbide
1928-1943: Discount Rate
1929-1937: Monsanto Co.
1937-1969: Intelligent Investor
1939-1965: Utility Stocks v. Interest Rates
1941-1967: Texas Pacific Land
1947-1970: Inventory-Sales Ratio
1948-2019: Profits v. DJIA
1949-1970: Dow 600? SRL
1958-1976: Gold Expert
1963-1977: Farmland Values
1971-2018: Nasdaq v. Gold
1971-1974: REIT Crash
1972-1979: REIT Index Crash
1986-2018: Hang Seng Index Cycles
1986-2019: Crude Oil Cycles
1999-2017: Cell Phone Market Share
2008: Transaction History
2010-2021: Bitcoin Cycles -
Interesting Read
Inside a Moneymaking Machine Like No Other
The Fuzzy, Insane Math That's Creating So Many Billion-Dollar Tech Companies
Berkshire Hathaway Shareholder Letters
Forex Investors May Face $1 Billion Loss as Trade Site Vanishes
Why the oil price is falling
How a $600 Million Hedge Fund Disappeared
Hedge Fund Manager Who Remembers 1998 Rout Says Prepare for Pain
Swiss National Bank Starts Negative
Tice: Crash is Coming...Although
More on Edson Gould (PDF)
Schiller's CAPE ratio is wrong
Double-Digit Inflation in the 1970s (PDF)
401k Crisis
Quick Link Archive
Category Archives: NLO Market Indicator
NLO Market Indicator Revisit
We received a question from our member and wanted to revisit our market indicator:
Hi New Low – I have a question about the market indicators — right now, the buy is showing -5, and the sell is showing -1…. I’m not sure what this means because you say when the sell is -1, that’s a bearish indicator and a time to preserve cash, but the buy is showing quite bullish at -5 (given you say it’s a time to be bullish at -6).
The market indicator is our proprietary model that combines various data into a single model with the intention of identifying inflection points in the market. Continue reading
NLO Market Indicator–November 10, 2022
The market had one of the largest daily gain since 2020 today with the S&P rising 5.5% and the Nasdaq jumping 7.3%. Such action pushed S&P 500 above the most recent high of 3,900 in late October. Below is the current view of our Dow Theory Indicator and NLO Market Score ®. Continue reading
NLO Market Indicator–September 16, 2022
The market fell another 5.8% this past week and has lost over 9% in a month. Continue reading
NLO Market Indicator–June 14, 2022
On Monday June 13, 2022, the market fell nearly 4% and triggered our Market Score down to –6. The last time we saw this was on March 12, 2020. Continue reading
NLO Market Indicator–May 11, 2022
Since our update on 4/29/2022, the market continue to move downward and now reaching a yearly low. Our Market Score and Dow Theory Indicator turned negative on May 9, 2022. Continue reading
NLO Market Indicator–April 29, 2022
The S&P 500 lost -9% in the month of April and many indicators are pointing to a bearish market. Our Dow Theory Indicator (red line) has not turned negative yet. However, all major indexes are approaching their yearly low (see second chart below) and surely will trigger our indicator to move into negative territory of –1 and give us a sell signal.
Although an official sell signal hasn’t been triggered by this indicator, our read on the market breadth has been negative since the Market Score (green line) went into negative territory on February 1st. At the time, the S&P 500 was at 4,547 which is 10% higher than current level.
A buy signal occurs when market capitulates to the downside. A mark of –5 indicate a market capitulation to the downside and triggers a buy signal. Continue reading
NLO Market Indicator–June 4, 2021
Major indexes rallied to end to week a little closer to their all-time high. Both the Dow Industrial and S&P 500 are a fraction of percentage away from reclaiming the peak. However, we are seeing concerning sign from our NLO Market Indicator. We explore the current environment and revisit the financial crisis and dot-com bubble to see the similarities. Continue reading
NLO Market Indicator–Dow Theory Indicator March 2021
It was a strong month for the market with S&P 500 gaining 1.8% while the Dow Jones Industrial topping 4.6%. However, we are seeing some weakness in the small cap area as the Russell 2000 was down about 2% for the month. It’s becoming more apparent now that a switch to value from growth is occurring as DJI have out performed RUT since early February. DJI rose 6% while the RUT lost 0.6%. One can revisit our assessment of Market Ratio here.
That being said, our NLO market indicator have not show any sign of weakness. Most major indexes made all-time high in March. That wasn’t the case for Nasdaq and Dow Jones Utility. Below is a view of where we are at the end of March. Continue reading
NLO Market Indicator – Dow Theory Indicator February 2021
The market's recent run-up coupled with volatility may cause some concern for market participants. As recent as last Monday, February 12th, we received a confirmation of the rising trend based on Dow Theory. Both the Dow Jones Industrial Average and Dow Jones Transportation Average closed at their all-time high.
To that point, we want to discuss a proprietary market indicator which shows the state of the market. We will reveal the details of the indicator but the essential components are the Industrials and Transports which provide us with the longest history of data to back-test.
The chart below shows the S&P 500 in blue plotted against the indicator which we will call Dow Theory Indicator. The one million dollar question is how do we know when a substantial market correction is coming. This isn’t an exact science but this is our best attempt. Typically, we see that the market (S&P 500) fails to break above the high and Dow Theory Indicator drops into negative territory. Continue reading
Posted in Dow Theory, Dow Theory Confirmation, NLO Market Indicator, NLO Market Score
Tagged members
NLO Market Score – Our Proprietary Market Timing Tool
The concept of a market indicator or market timing tool isn't a new concept. While compounding is THE most power force in investing, market timing tools come in a close second. As the old saying, "don't tell me what to buy, tell me when to buy".
Our team has developed a proprietary market timing tool which we are calling NLO Market Score. In its simplest form, the tool assigns a score ranging from -6 to +6 to the market and is similar to market breath.
For example, the market score reached -6 on March 12, 2020 when the S&P 500 was at 2,481. Since then, the market have risen nearly +50% in less than a year.
However, the 2008 bear market pushed the score to -6 early in October thus leaving little upside if you did a one time purchase. No single (or multiple) market indicator will be accurate enough to call market bottom and that goes for ours as well. That being said, we've back tested the indicator with a reasonable success rate which we define as any positive return.
Below, in table A, we have summarize the outcome of purchasing the S&P 500 when market score reaches -6. In table B, we show the details of the trade/transaction.
Table A:
Table B:
A close observation and you will notice that there are purchase dates within days of each other. To adjust for that, we have taken only the first indication that occurs within that year. The result are summarized in tables C and D.
Table C
Table D
As a long-term holder of equities, we are pleased with an extreme high success rate coupled with above average (>10%) annualized return.