Historical Examination Of The Dow Jones Dividend

The Dow Jones was down six points this week, effectively unchanged from last week’s close.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 590\Chart #1   DJIA BEV 1982_19.gif

Below is the Dow Jones in daily bars. I circled this week’s data, and what little market action we saw this week. Be ye a bull or a bear; don’t get discouraged as there’s always next week.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 590\Chart #2   DJIA OHLC.gif

Later in this article I’ve covered the history of the Dow Jones dividend yields and payouts. But as the stock market was very quiet this week, there isn’t much to comment on, so let’s move into gold.

This week found gold below $1,300 for the first time since January 24.  But it’s evident in its BEV chart below that the retracement so far is minimal.

Gold in its current post August 2011 bear market is a much different bear than it was from 1980 to 2001. At its deepest decline in December 2015 (-44.24%), gold had less downside than its correction low seen in August 1976 (-47.26%). This fact leads me to understand our current decline as more a correction within a bull market than a bear market. An incredibly frustrating correction, but a correction within a bull market nonetheless.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 590\Chart #3   Gold BEV 69_19.gif

I’m also looking at the -27.5 BEV ($1366) line of resistance seen in the chart, when since 2013 this line has confounded all attempts by the bulls to break above, and stay above it. It reminds me of the Dow Jones from 1966 to 1982, where Dow Jones 1000 proved to be the line of doom for the bulls (chart below).

Five times the bulls attempted to get the Dow Jones to break above, and stay above 1000 during these sixteen years only to fail miserable on each attempt. When the Dow Jones finally did break above this line of resistance in October 1982, the ingrained bearishness of the market prevented most investors from believing what was happening before their very eyes; a new bull market had begun in the stock market.  

For your information our bull market, with the occasional 40% market corrections since January 2000, is the same bull market seen beginning in 1982 below.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 590\Chart #4   Dow Jones 1000 Line of Doom.gif

I had some comments last week on Craig Hemke’s revelation in the palladium market.  One item I missed was an indexed chart for gold, silver, platinum and palladium. So, I thought this week’s market commentary would benefit from this chart as it’s very interesting, especially in light of the line of doom chart above.

It’s not just gold that’s currently burdened by a multi-year line of resistance; silver and platinum are too. But look at palladium below (Purple Plot); since last August it has been making new all-time highs for the past six months. It broke loose of the “policy makers” valuation control system, and I don’t think they can get palladium back in their box.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 590\Chart #5   PM's Indexed from August 1993.gif

But they’re trying, as seen in the table below.  The bears in the palladium market have promised to deliver 61.16 ounces of metal, metal that will never be delivered to the market for every ounce of palladium in COMEX storage.

The day is coming when the shorts (the sellers of paper palladium) in the palladium futures market are going to have to close their losing positions. To do so, they are going to have to buy long contracts in the futures market. What happens then may be a historic moonshot for the price of palladium.

Considering the shorts in the palladium market are the same big banks and hedge funds that are now shorting gold and silver, a painful lesson in palladium may weaken their desire to participate rigging the gold and silver markets. Let’s pray that 2019 will prove to be a totally different year for gold and silver investors.

At the close of the week, gold and its step sum below still look positive. Yes gold was down $35 since last Friday, but advances in any market always include some declines, just as market declines always see some advances. What gold needs to do now is break above its line of resistance at $1366; that done we may see the price of gold also breaking free of the “policy makers”’ bearish machinations.

C:\Users\Owner\Documents\Financial Data Excel\Bear Market Race\Long Term Market Trends\Wk 590\Chart #6   Gold & SS 98-18.gif

The Dow Jones and its step sum are looking good in the chart below. This week the Dow Jones closed only 2.99% from making a new all-time high.  This gap between this week’s close and stock market history could easily be closed in the next few weeks; maybe next week.  

What happens after that is the big question.  I don’t expect the moonshot the Dow made in 1982-83, or the advance palladium has made since last August will prove to be the answer to this question.  

I don’t know what the market capitalization for the NYSE and NASDAQ are, but after many decades of being inflated, they must be huge. To inflate these market valuations another 10%, or even another 5% above their current all-time highs will be very difficult.

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