Market Commentary 9301
January, 2012 Data:
Part 1
FORECASTS
12 MONTH FORECAST
The 12 month forecast for the Dow Composite Index is in the table at the top of
this page. Foercast-Chart.com is forecasting a Dow Jones Composite Average
of 4291. The table shows a HDTFA of 533 which suggests that the February,
2013 Dow Composite Index could easily close anywhere between 4824 and
3758. Links to Forecasts for twenty-two other stock indexes may be found on
the right side of this page.
10 YEAR FORECAST
Forecast-Chart.com publishes a 10 Year Forecast for the following stock
market indexes: Dow Jones Industrial Average, FTSE 100 (United Kingdom),
Hang Seng (Hong Kong), S&P 500, S&P SmallCap 600, S&P MidCap 400,
NASDAQ 100, TSX Composite (Canada), Russell 3000, Russell 2000, Russell
1000 and the Wilshire 5000. For example, the probability that the S&P 500 will
be down at least 20% in 10 years is estimated (January, 2022 close compared
to January, 2012 close). Over 100 YEARS of historical data was used to
calculate the probabilities. The indexes with the highest probability of gaining
over 200% in the next 10 years are the Russell 3000, the Russell 1000 and the
S&P 500. The indexes with the lowest probability of gaining over 200% in the
next 10 years are the S&P SmallCap 600 and the S&P MidCap 400. To see
these forecasts, click the Stock Market Forecast link in the upper right corner of
any page, then select the index you are interested in.
Part 2
MARKET HIGHLIGHTS
All Time High 4631 (May, 2007)
January, 2012 close 4355
Decline From All Time High 6%
10 Year Return 50%
5 Year Low 2435 (February, 2009)
Gain From 5 Year Low 79%
The highest all time monthly close in the DJCA was 4631 in May, of 2007. The
January, 2012 close was 4355. That's a decline of 276 points or 6% below the
Dow Composite Average all time high. The Dow Composite Index is up 50%
over the last 10 years. It has gained 7% over the last 12 months.
The January close was 123.07 points higher than the December, 2011 close of
4232, resulting in a 2.91% rise in January.
The 5 year market low for the Dow Jones Composite Average was 2435 in
February of 2009. The January, 2012 close at 4355.24 represents a 79% gain
since February, 2009.
Foercast-Chart.com's historical research covers the Dow Composite Index back
to January, 1981. All calculations are based on the monthly market close in the
DJCA, excluding dividends.
This page provides a five year chart and a forecast for the Dow Composite
Average. For links to longer term charts, look at the links under the five year
chart (above). One link opens a ten year chart. Another opens our longest term
graph on the Dow Composite Index. Just one glance at our long term charts can
provide tremendous insight into the historical trends of the financial markets.
The table above presents historical data on the Dow Jones Composite Average
categorized by the months of the calendar.
In this site, you may view the month, year, five & ten year returns for 23 stock
market indexes in one convenient table. U.S. & foreign, small cap & large cap
indexes are included. Click the Market Trend Research link in the uppermost
left corner of any page in this site. The table of contents for Market Trend
Research will open. Click the link to the Stock Index Return Scoreboard in the
table of contents.
Part 3
ROLLING RETURNS, 1980 - 2012: Dow Composite Index
Rolling Period Last / Percentile Best / Average / Worst
1 Year 7% / 37th 54% / 10% / -41%
2 Year 27% / 62nd 76% / 20% / -42%
4 Year 2% / 20th 130% / 44% / -29%
8 Year 46% / 20th 229% / 104% / -24%
16 Year 150% / 7th 809% / 347% / 94%
How do you read the table?
For example: Rolling 2 year period returns are shown on the second row. In the
latest rolling 2 year period, (2/2010 - 1/2012), the Dow Composite Index
returned 27%. That period scored in the 62nd percentile, meaning that it
scored better than 62% of all rolling 2 year periods since 1980. The Best rolling
2 Year period since 1980 returned 76%. The worst returned -42%. The
average rolling 2 year period returned 20%.
What is a rolling period?
It's an overlapping period in a data base. For example: In the 2 year period
included in 2000 - 2001, there are 13 complete rolling 12 Month Periods. The
first is January, 2000 - December, 2000. The second is February, 2000 -
January, 2001. The third is March, 2000 - February, 2001 and so on. The last
complete rolling 12 Month Period in the 2000 - 2001 period is January, 2001 -
December, 2001.
How is this information useful?
Best and worst case scenarios may be estimated based on historical facts.
Also, the relationship of the periods is sometimes very helpful. Suppose that the
worst rolling 8 year period in the last 50 years returned -30%. Suppose also
that the latest 4 year period has returned -50%. Market psychology at this point
may be one of great fear or possibly even panic. If the market stays flat for 4
more years, it will break the 8 year decline record by a whopping 20%! (-50%
minus -30% equals -20%.) 50 plus year records are not often broken. That
provides reason to hope that the market will recover that 20% over the next 4
years. If it does, then the 8 year loss will be 30%. The longest index histories
are found in the DJIA, FTSE 100 with FT 30, DJTA, DJUA, S&P 500, & NASDAQ
100
The number of periods in each category for the Dow Composite Index are as
follows:
1 Year: 362
2 Year: 350
4 Year: 326
8 Year: 278
16 Year: 182
Dividends are not included.
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Monthly close for the Dow Jones Composite Average (DJCA) is plotted in gray. The forecast for the
target month is shown in green. See other links related to this stock index below.
Dow Jones Composite Average (DJCA) - 5 Year History
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Dow Jones Composite Average (DJCA) Forecast
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Forecast for the monthly close of the Dow Jones Composite Average (DJCA) for the target month indicated.
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Updated Thursday, February 2, 2012.
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Dow Composite Index Forecast
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Dow Composite Index: Historical Monthly Change
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April May June
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3.05 0.56 -0.91
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July Aug Sept
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0.85 -1.00 -0.87
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Over the last 20 years, certain months have typically performed better than others. The average monthly return for each calender month over the last 20 years is shown above. Dividends are not included.
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Current Analysis & Forecast: Dow Composite Index
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