Peak – AOD Fall Intervals as an indicator of US Stock Market Corrections
In our Spring 2017 Market Technician journal, David McMinn did an article predicting we were due a sell-off in the stock market in December 2017.
The actual event arrived later than expected in early February 2018 with two one day falls over -4.00% in the Dow Jones Industrial Average (DJIA). At the time, the slump was only expected to be a temporary correction based on historical precedent. All major annual one day (AOD) falls (≥ -4.00%) that that occurred shortly after a record high, happened in a brief correction. This trend has persisted over the past 120 years and was first proposed by McMinn (1997). In contrast, large AOD falls taking place well after a record peak, usually indicated the beginning of a bear market. Both trends were very consistent throughout DJIA history.
David McMinn has written an addendum to his original article. To read, please click here.
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