The Dow Jones historical chart on 100 years has a breathtaking setup. This post features 4 must see Dow Jones 100 year charts. The Dow Jones Industrials Index is the most known and oldest stock market index. The Dow Jones historical chart on 100 years has a breathtaking chart pattern. To us, the Dow Jones 100 year chart suggests that this market is moving to 32,000 points where it will meet 100 year resistance. Note that we frequently update our Dow Jones forecast for 2021, and yes our Dow Jones forecast 2021 is bullish.
[Post Corona Crash Update posted on 10.25.20. Please scroll down for the most up-to-date Dow Jones 100 year charts.]
[Post Corona Crash Update posted on 08.23.20. Please scroll down for the most up-to-date Dow Jones charts.]
[Corona Crash Update posted on 03.27.20. Please scroll down for the most up-to-date Dow Jones charts including the one right after the Black Thursday and Black Monday crashes in March of 2020.]
The Dow Jones Industrials Index was founded on February 16th, 1885, as per Wikipedia. The index tracks 30 large, publicly owned companies based in the United States.
The Dow Jones organisation grew over time and now has lots of financial media in its group, think of MarketWatch and Barron’s.
Dow Jones Chart On 100 Years
The longest timeframe of the Dow Jones chart is the quarterly chart on 100 years. This chart provides a breath taking picture with essentially one huge rising channel.
The one and only time that the Dow Jones index fell below its 100 year rising channel was in 1929-1933. No coincidence the Wall Street crash of 1929 resulted in the Dow Jones falling to levels so low even on a 100 year rising channel.
A rising channel is a common thing on any chart. However, it is really a beautiful setup on the Dow Jones 100 year chart.
Another important observation on the 100 year chart of the Dow Jones is what happens every time this index touches support as well as resistance.
Each and every time the top of this giant channel is tested it results in a long and/or exceptionally aggressive decline. The test of resistance took place only in 1928 and 2000. So any chartist with solid charting skills could have seen this market top coming way in advance. Similarly in 2007 the Dow Jones tested resistance of the upper band (right below resistance).
Dow Jones 100 Years Historical Chart: Distinct phases
Basically, between 1932 and 1966, the Dow Jones index has risen 10-fold.
Buying in 1966 would have been catastrophic for one’s portfolio. That is because the Dow was trading in the upper area of its long term channel. The Dow corrected combined with sideways trading during 2 decades only to test support levels multiple times. As of 1984, the Dow went in almost one straight line up until the year 2000.
Between 2000 and 2013 the Dow has traded in a wide range.
In 2013 a triple top breakout took place. Arguably, that’s the moment when the stock bull market started, not March 2009.
Right now, the Dow Jones Industrials Index is trading in its upper band of its long term rising channel. It does not trade at an extreme level though, it is some 25% to 30% below extreme levels.
Chart update: October 25th, 2020
Future Direction Of Stocks Based On The Dow Jones 100 Year Chart
It is tough to forecast future moves of U.S. stock markets solely based on the Dow Jones historical chart on 100 years. The 100 year timeframe is unusually long, so any foreacast derived from this can only be very long term oriented.
We must use a shorter timeframe, and combine it with the 100 year Dow Jones chart. That’s why we include the 20 year Dow Jones chart.
Chart update: October 25th, 20′
For future price direction we use our proprietary method as explained in our piece detailing 100 investing tips. Essentially, it is a combination of leading indicators like 10-year Yields, currencies, as well as indicator indexes like the Russell 2000 that help forecast future stock market directions.
However, there are 2 future scenarios we can potentially see in the Dow Jones historical chart on 100 years.
- The Dow Jones Industrials Index has reached the upper area / band in its very long term rising channel since 2017. This happened only twice before: in 1929 and 2000. Given that this happens so rarely it may suggest that this is a major top in the making which will resolve to the downside.
- However, we believe another scenario is more likely. The rise since 2009 happened from the median of this long term rising channel. It certainly does not compare with the rise between 1982 and 2000 (bottom to top of the channel). So the last 10 years saw a strong, but nowhere near an extreme rise. The thesis of this 2nd scenario is that the Dow Jones Industrials Index will continue to trade in its upper channel. This will deliver moderate but continuous gains in the next few years.
We continue to look to the currency and bond market for pointers whether we are in scenario 1 or scenario 2.
Dow Jones 2020 Updates: The Most Brutal Crash In History
This paragraph and below charts contain an up-to-date version of the Dow Jones long term chart on 100 years.
We updated this post several times in 2020, the year of the most brutal stock market crash in history.
100 year Dow Jones chart on March 27th, 2020
This is the up to date 100 year Dow Jones chart on March 27th, 2020, right after the lows were set.
Chart update: October 25th, 20′
Clearly the Corona crash came at a moment when the Dow Jones index was very close to its 100 year resistance level. However it did not touch it yet.
To be more precise the 100 year resistance point was 32,000 points. No coincidence that 32,000 was our target as described last year in A Dow Jones Forecast For 2020 And 2021 (32,000 Points).
There might be a reason why the Corona crash was so violent: the Dow Jones index was not far from its 100 year top. So there was much more downside potential, and the epidemic nature of the crash only accelerated this effect.
100 year Dow Jones chart on August 23d, 2020
In essence near the end of the summer of 2020 there are not many new insights on the 100 year Dow Jones chart. The most important insights come from the 20 year chart as well as the 12 year Dow Jones chart, both in articles linked higher up in this article.
We stay focused on identifying the top of this 100 year channel, and the shorter timeframes will help us hit these tops. That’s when we might be selling.
Chart update: October 25th, 20′
100 year Dow Jones chart on October 25th, 2020
This is the up to date 100 year Dow Jones chart on October 25th, 2020, some 7 months after the Corona crash lows.
Chart update: October 25th, 20′
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Focus on the charts, ignore the news
One might ask why we are so much focused on the Dow Jones chart and so many other charts.
It is anyone’s intuitive reaction to focus on the news, and complement news with the charts.
We thoroughly disagree with this, and we can easily make the point by reviewing some stock market articles from the March period (the Corona crash lows).
While stocks were setting a major low the financial news became more depressing than ever. Just listening to the news reports one would think the crash had to become much worse.
Nothing was further from the truth. When stock market news was suggesting the worst was yet to come the leading stock market indexes were about to turn sharply higher.
The Great Coronavirus Crash of 2020 Is Different on Bloomberg (March 19th, 2020)
This article published right at the lows of the Corona crash made you think that the market would come to a stand will as the economy would come to a stand still. As if markets follow the economy …
It’s the opposite: the economy follows markets! And charts can help us stick to this truth.
Chart of Wall Street’s ‘fear’ index in 2020 illustrates how unhinged stock markets have been over coronavirus compared to the 2008 crisis on Marketwatch (March 12th, 2020)
This article suggested a gradual increase of volatility, while volatility exploded a few days later only to start coming down 3 weeks later. An absolutely horrible prediction regardless whether it was very hard to predict at that point in time.
Buckle Up Your Money Belts: The Ride Won’t Get Smoother Soon on Barron’s (March 20th, 2020)
Exactly at the lows of the stock market this article suggested much more downside in stock markets!
The Dow is on pace for its worst month since the Great Depression, but here’s why all hope isn’t lost amid the coronavirus crisis on Marketwatch (March 23d, 2020)
Exactly at the lows of the Dow Jones this article made you think the worst was to come because of a death cross:
Besides obliterating the bullish trend the plunge has done a lot of technical damage, with a bearish, so-called death cross forming in the Dow, where the 50-day moving average — which many chart watchers use as a short-term trend tracker — crosses below the 200-day MA, which is widely viewed as a dividing line between longer-term uptrends and downtrends.
18 Stocks to Buy Amid the Coronavirus Carnage, According to Barron’s Roundtable Experts on Barron’s (March 13th, 2020)
From all the momentum stocks that did amazingly well, think Docusign / Tesla / Zoom, these experts didn’t really mention hardly any of them. That’s how ‘easy’ it is to identify future winners during a crash.
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