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Category Archives: S&P 500
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Posted in DJIA in Review, Dow Industrials, Richard Russell Review, S&P 500
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S&P 500 Price Momentum
Below is the chart of S&P 500 Price Momentum. Continue reading
Market Return After Exceptional Year – 2023
It’s no secret that 2023 was an exceptional year to be long the market. S&P 500 gained 23.8% while the Dow Jones Industrial Average rose 13.7%. In this review, we review the historical return of the subsequent year after a strong market uptrend. This frame work provide an objective view for market performance from historical pattern. For more on this work, review or original post here. Continue reading
S&P 500 Downside Target Update
This posting will update the downside targets for the S&P 500 Index using Dow Theory.
Dow’s Theory: 2020-2023
Applying Dow Theory from the March 23, 2020 to March 17, 2023 period, the downside targets for the S&P 500 Index are: Continue reading
Short-Term S&P 500 Price Momentum $SPY (1/25/2023)
Below is a chart of the S&P 500 as of 1/25/2023, reflecting Price Momentum data. Continue reading
Market Historical Returns and Subsequent Year
Major indexes ended the year down -10% to -30% for the year. Tables below shows the historical market return and what occurred in the subsequent year. Hopefully this provides some framework of what to expect in 2023. Continue reading
YTD S&P 500 Price Momentum $SPY
Below is a chart of the S&P 500 for 2022, reflecting Price Momentum data.
Dow and S&P 500 Comparable Levels $SPX
This is an update to a comparison we did showing how alike the the two indexes, Dow Jones Industrial Average and S&P 500, are: Continue reading
S&P 500 Downside Targets
This posting will cover the downside targets for the S&P 500 Index using Dow Theory.
Dow’s Theory: 2020-2022
Applying Dow Theory from the March 23, 2020 to April 29, 2022 period, the downside targets for the S&P 500 Index are: Continue reading
S&P 500 Downside Targets Using Dow Theory and Gould’s SRL
This posting will cover the downside targets for the S&P 500 Index using Dow Theory and Edson Gould’s Speed Resistance Lines [SRL].
Dow’s Theory: 2020-2021
Applying Dow Theory from the March 23, 2020 to September 2, 2021 period, the downside targets for the S&P 500 Index are: Continue reading
Market Rewind: S&P 3,384/Dow 3,384
On September 14, 2020, the S&P 500 Index closed at 3,383.54. To celebrate, we are going to review what Richard Russell’s Dow Theory Letters had to say about the market when the Dow Jones Industrial Average closed at 3,384.32 on August 4, 1992.
Russell said:
"...the nation's in a 'contained depression'."
"Interest rates have collapsed, consumers are gloomy, and nobody's taking out loans. That's exactly what happened during the Great Depression--with one big difference. Then the stock markets were crashing but today the markets are bullish. So how are the two periods different? As I interpret it, today's stock market is saying that somewhere ahead business is going to pick up and people will start buying again---unlike during the 1930s."
"for the first time since the Great Depression almost all the nations in the northern hemisphere are in various stages of a recession."
"...the widely publicized figure is that 40% of the 5,000 listed stocks have been downed by 30% or more. On that basis, some analysts are referring to 1992 as the 'year of the hidden bear market'..."
That was page one of six from the August 5, 1992 issue of Dow Theory Letters. Fascinating? History doesn’t need to repeat. However, good analysis starts with precedents first, as outlined by Charles H. Dow, and diverges afterward, not the other way around.
What was being said by other analysts is not too different from what we’re hearing today. We all know what has happened to the Dow since August 4, 1992.
S&P 500 Additions and Deletions 2003 to 2016
Below are the S&P 500 Additions and Deletions from 2003 to 2016. Continue reading
Are the S&P 500 and the Dow exactly the same?
We can’t emphasize enough how we are not stock market bulls. We simply present the data.
In fact, we have a bearish leaning bias after critically reading the work of Richard Russell from the 1990’s until his passing in 2015. Below we are going to take an unusual and highly suspect look at the similarities between the S&P 500 Index and the Dow Jones Industrial Average.
Revealing the Truth about the Market
Many market observers complain how irrelevant the Dow Jones Industrial Average is, lacking 470 companies and being price weighted. However, the Dow Jones Industrial Average is the perfect conservative model for future outcomes of the S&P 500 Index.
Did you know?
From a level of 810 to 2,749, on the S&P 500, it took approximately 5,820 trading days from February 24, 1997 to April 8, 2020. In the same number of trading days, the Dow Jones Industrial Average increased from 810 on August 18, 1966 to 2,759 by October 12, 1989.
What the Dow Did was Staggering
If we step back from the already stunning revelation above and look at the bigger picture, there is more to this scenario than meets the eyes. For example, our starting point at 1966, the Dow Jones Industrial Average was coming off of the biggest bull market in history. From the low in 1942, the Dow increased from 92.92 to as high as 995.15 in 1966, a +971% increase.
A 10-fold increase sounds enticing, however, this was with the backdrop of rising interest rates and growing national debt. For a sense of perspective on the overall sentiment at the time, the following is from Richard Russell’s Dow Theory Letter in 1967:
It wasn’t until the economy faced the uncertainty of interest rates (fear that rates would not continue to climb) in 1966, that the market fell apart and began trading in a range until 1982 (1966-1982).
What Does This Mean?
The Dow Jones Industrial Average was a stodgy heavy industry index when it managed to accomplish from 1966 to 1989 what the S&P 500 has accomplished in the heavily weighted technology index has accomplished from 1997 to 2020. There should be critical questions for those who claim that the S&P 500 is better than the Dow Jones Industrial Average.
Based on the data above, there is absolutely zero difference between the two indexes when put into the proper context. For now, we have painted a general picture of how the two indexes matched performance over exactly the same period of time. In our next posting, we explore what the future holds for both indexes.
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Posted in DJIA, Richard Russell, S&P 500