DOW 13,000, NO BIG DEAL

Those who have read my book know that the Dow Jones Industrial Average (DJIA) and the 15-51 Indicator started 1996 at 5,117.  The Dow closed over 13,000 points today and for the first time since May 2008. Some thought it was a big deal.

Not me.

The 15-51 strength Indicator closed the day at 59,633 – up an amazing 373% since it last ended a session at 13,000, which was in March 2003.  The Dow returned just 38% during this same time.  With superior 15-51 construction, the 15-51 Indicator produced roughly 10 times more return than “the market” during this long stretch of time.  Now that’s a big deal!

The same is true in the short term.  The Dow returned 6% for the most recent 12 months while the 15-51 Indicator gained a superior 30% return – five times better for the period. Below is a picture of the same story with a different look.

2-28-12

Consider each graphical point on my charts to represent a single dollar.  In this example, the 15-51 Indicator started the period at $45,571. The Dow, which started this period at 12,273 points, was scaled up to match the Indicator’s starting point.  From there they traveled their own course until the period ended.  The 15-51i turned $45,571 into $59,633 while the Dow produced $11,000 less.

Even though the scale has changed the picture is still clear.  “The market” is at the top of its range and looks scared to be there – so unlike the 15-51 Indicator which has exploded through the action zone high point.  This dynamic performance makes it easier to make money in the stock market.  That’s what superior construction does.

That’s one point.

Another is to notice the obscene spike in the 15-51i’s value when considering the dreadful market conditions that currently surround it.  Take this as a red flare warning. Hyperinflation of this kind brings about steep and swift stock market corrections.  So REALLOCATE your portfolio now if you already haven’t done so!

But if you have appropriately planned ahead then hold onto your hat and wait for the sale extravaganza to begin.

Stay tuned…