Dow Jones-Thinking Ahead

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I was just going through some information I had on my PC with regards to the Dow Jones Industrial index from 2007.

In short, the period after US midterm elections are generally quite strong. These elections happen every 4 years and the last one was in 2006. The next one is in 2010. Obviously, we are only half way through 2009 but it might be worth thinking about coming back in to stocks next year based on statistics.

If you take a look at the stats below it clearly shows that the move from the low of the year in a midterm election year to the high of the following year is quite a stong period. Averaging out at 50%.

Click image to view full size chart in a new window

The low of 2006 was in the mid 10,000 area for the DJIA. The statistics were targeting 15,000ish. The DJIA didn’t quite make 15k but did make a 32% increase on it’s 2006 low to it’s high in 2007.

Something also worth noting; most of the highs are in the latter half of the year and most of of the midterm lows are in the beginning half of the year (although a bit more sporadic).

So obviously, if we dip down in the early parts of 2010 you can be sure that there will be buyers out there.

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