Jay Kaeppel | Feb 08, 2017 10:30AM ET
As a proud graduate of “The School of Whatever Works” I for one am not afraid to “get down in the weeds” when it comes to finding ways to get an edge in the stock market. Take for example the 40-week cycle in the stock market.
I have written about this cycle several times in the past so I won’t go into a long-winded explanation here. To make a long story short, it goes like this:
Our test starts on 9/8/1967.
(DO NOT STOP READING – I know, it sounds ridiculous, right? But at least consider the results detailed below)
For testing and actual trading purposes:
For actual trading purposes:
Figure 1 displays the growth of $1,000 invested since 1967using the “system” detailed above versus buying and holding the Dow.
Figure 1 – Growth of $1,000 using the 40-Week Cycle System described above (blue line) versus buying and holding the Dow Jones Industrials Average(red line); 9/8/1967-2/7/2017.
To put things in perspective, Figure 2 displays the growth of $1,000 invested in the Dow ONLY during every “bearish phase” since 1967.
Figure 2 – Growth of $1,000 invested in Dow Jones Industrials Average only during “bearish phases”; 9/8/1967-2/7/2017.
For the record, since 1967:
The next 40-week cycle begins at the close on 2/17/2017. The “bullish phase” extends through the close on 7/7/2017.
Welcome to “the weeds”.
Disclaimer: The data presented herein were obtained from various third-party sources. While I believe the data to be reliable, no representation is made as to, and no responsibility, warranty or liability is accepted for the accuracy or completeness of such information. The information, opinions and ideas expressed herein are for informational and educational purposes only and do not constitute and should not be construed as investment advice, an advertisement or offering of investment advisory services, or an offer to sell or a solicitation to buy any security.
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.