>The December Low Indicator
It states that if the Dow's closing low in December is violated within the 1stQ of the year, the market will be down at some point later that year.<
The Dow Jones Industrial Average did indeed close lower than the December low of 2005 earlier this year in January.
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The closing low on January 20, 2006 was 10,667.39
The lowest low on December 30, 2005 was 10,717.50
finance.yahoo.com
We will at some point get a major top. It certainly is not impossible this year. The December low indicator does not rule it out because we did get a lower low.
bigpicture.typepad.com
When the Dow closes below its December closing low in the first quarter, it is an excellent techncial warning sign. The lowest actual closing price for the Dow Jones industrials in December was made on the very last trading day of the year -- 12/30/2005 at 10,717.50.
Closing price on Friday? 10,667.39
What's that mean for the market? Consider what the December low has meant in the past:
"The December Low Indicator was originated by Lucien Hooper, a Forbes columnist and Wall Street analyst back in the 1970s.
Hooper dismissed the importance of January and January’s first week as reliable indicators. He noted that the trend could be random or even manipulated during a holiday- shortened week. Instead, said Hooper, “Pay much more attention to the December low. If that low is violated during the first quarter of the New Year, watch out.”
The December low not being violated improves upon the January Barometer. If the December low is not crossed, than according to the stock trader's almanac, the January Barometer becomes virtually perfect, right nearly 100% of these times.”
RtS |
