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. As part of our charts analysis, and our aspiration to host the coolest long term charts in the world we feature our analysis on the Dow Jones historical chart on 100 years in this article. To us, it suggests either a major top is being set in 2019 or a ‘new normal’ with moderate but continuous gains in U.S. stock markets. As November 2019 kicks off we also have a bullish forecast for the Dow Jones for both 2020 and 2021: A Dow Jones Forecast For 2020 And 2021.
[Post Corona Crash Update posted on August 23d 2020. Please scroll to the bottom to find the most up-to-date Dow Jones 100 year chart with other up to date Dow Jones charts.]
[Corona Crash Update posted on March 27th 2020. Please scroll to the bottom to find the most up-to-date Dow Jones chart as well as insights to our forecasts after the Black Thursday and Black Monday crashes in March of 2020.]
[Ed. note: on October 27th 2019 our editorial team added an update in this article. Please scroll down to find the most up-to-date Dow Jones long term chart on 20 years.]
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.
Dow Jones 100 Years Chart: What’s next
It is tough to forecast future U.S. stock market direction solely based on the Dow Jones historical chart on 100 years.
For future directions 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.
Corona Crash Update on March 27th, 2020
This paragraph and below charts contain an up-to-date version of the Dow Jones long term chart on 20 years. We wrote this update on March 20th, 2020, at the depth of the Corona crash.
This is the up to date 100 year Dow Jones chart.
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.
Post Corona Crash Update on August 23d, 2020
This paragraph and below charts contain an up-to-date version of the Dow Jones long term chart on 100 years. We wrote this update on August 23d, 2020, 5 months after the depth of the Corona crash.
In essence there are not many new insights on this long term 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.
For more detailed Dow Jones charts we refer to our Dow Jones forecast as well as this article Dow Jones Long Term Chart on 20 Years *Corona Crash Update*.
According to us the Dow Jones index will move to the top of its 100 year channel in the next 24 months.
Follow our work, or become a premium member, to follow us on the ride to the top of the 100 year channel.
