The Dow Jones historical chart on 100 years has a breathtaking setup. This post features several must see Dow Jones 100 year charts and learnings from it. One of the key take-aways is that the Dow Jones managed to clear its 100 years rising channel in March of 2021. The price level it cleared, back then, was 31.7k points approximately. This is a crucial price point, going forward, investors definitely need to gauge trends of the Dow Jones index against this 31.7k level. In April of 2022, the index fell inside its channel again. One other take-away is that a stock market crash in 2023 is not likely to occur.
Right after the Corona crash we wrote this “the Dow Jones 100 year chart suggests that this market is moving to 32,000 points where it will meet 100 year resistance“. Our forecast was accurate, the Dow Jones even exceeded our price target.
We also forecasted that the Dow Jones would test 40k points which it didn’t. The Dow stopped rising some 7% below our Dow Jones 2022 forecast.
In this article we look at the Dow Jones historical chart on 100 years on 3 timeframes. We use the same 100 years chart and look at the monthly, weekly, daily timeframes.
Dow Jones Chart On 100 Years: monthly
The longest timeframe of the Dow Jones chart is the quarterly chart on 100 years.
The one and only time that the Dow Jones index fell below its 100 year rising channel was in 1930 and in 1974. 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 exceptional to see a 100 year channel like the one on the Dow Jones historical 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 tests of resistances that took place in the last 100 years: 1928, 2000, arguably 2020 (although not perfect). In 2021, the Dow Jones index exceeded its 100 year channel for some 12 months (until April/May of 2022).
This brings up the question whether aggressive selling can be expected heading into 2023? The one big difference between the occurrences in 1929 and 2000 is that the rally into the top of the channel was a very steep, multi-year rally. The shape is materially different in the period 2019-2023. This makes it unclear whether the test of resistance in 2022 is going to trigger a violent sell-off
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: September 2022
Dow Jones Chart On 100 Years: weekly
In this section, we zoom into the last 20 years on the Dow Jones 100 year chart.
As seen, the Dow Jones index was able to clear the 100 year channel in March of 2021. However, it fell back into its channel in April of 2022.
If we zoom in even more and look at the last 7 years we see how resistance of the 100 year channel was tested mid-August 2022 (please check the wick and rejection on below chart).
This view suggests that a topping pattern is in the making. However, the rally to the top of the channel was not as steep as back in 20ies and 90ies. The recovery after the Corona crash was steep, but the Dow Jones has been slowly making its way higher since 2017. So, this suggests that the Dow Jones might consolidate for a while as opposed to crashing similar to 1929 or 2001/2.
Chart update: September 2022
Dow Jones Chart On 100 Years: daily
In this section, we zoom into the last one to two years on the Dow Jones 100 year chart.
This chart angle shows how the Dow Jones cleared its 100 year channel in March of 2021. The index fell inside its channel in April/May of 2021. On August 16th, 2021 the index found resistance right at the top of the channel.
Chart update: September 2022
If we zoom in even more, we can see how the index is consolidating in 2022 in a pretty wide range right below the top of its channel.
Chart update: September 2022
We do expect that the Dow Jones will continue to consolidate heading into 2023. We see 29.6k as good support (on a 3 to 5 day closing basis) and expect the top of the channel to provide resistance. Note that the top of the channel will have risen in the meantime, so by January of 2023 the top of channel will be around 35k points.
Very, very important note: in March of 2021, the Dow Jones cleared the top of its 100 year channel around 31.7k points. This price point will continue to carry an above average importance, going forward.
In sum, we expect that the Dow Jones will work around 3 really important price points in 2023 and 2024: 28.8k as support (on a 3 to 5 day closing basis), 31.7k as a pivotal point, 35k points as the top of the channel early 2023.
The 100 year channel will be at 37k points, current ATH, around Feb/April of 2024.
Must-see charts: 100 year #dowjones charts. A 100 year breakout occurred in 2021. Similar tests resulted in mega crashes (1929, 2000, 2020). This is why we expect in 2023 a consolidation around the top of the 100 year channel.… Click To Tweet
Dow Jones Chart Right After The Corona Crash
100 year Dow Jones chart right after the Corona crash
This is the 100 year Dow Jones chart on March 27th, 2020, right after the lows were set.
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.
Focus on the charts, not 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). Right at a time when stocks were starting a major uptrend the financial news was a depressed beyond anyone’s imagination. Just listening to the news would anyone lead to the conclusion that the crash had to become much worse.
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.
So you thought financial media would have it only wrong during the worst crash in history of markets? Again, nothing is further from the truth. Below are a few illustrations of how financial media was bearish in September of 2021. Remember, that’s a few days before a major bull run started (first week of October of 2021).
Stock Market’s September Slump Exposes Messy Underside on WSJ (Sept 30th, 2021)
Stocks Had Their Worst September in a Decade. October Might Bring More of the Same on Barron’s (Sept 30th, 2021)
Here is another illustration of an article that appeared on Dec 31st, 2021: S&P 500 ends 2021 with a nearly 27% gain, but dips in final trading day: “It’s going to be tougher, I think, in the second half of 2022. Still, I think you’re going to have enough market for stocks next year.” What happened, in reality, is a dismal first half of the year in 2022.
Indeed, January was the worst month since the Corona crash: Stocks rally to end a dismal January, but S&P 500 still posts worst month since March 2020.
Note that 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 organization grew over time and now has lots of financial media in its group, think of MarketWatch and Barron’s.
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