Will Dow Industrials See Decade of Flat Market Returns?

dow jones industrial average peak plateau stock market chart image year 2021

Over the years, active investors turn to several indicators to gauge market returns. And these indicators are used over varying timeframes, depending on the data and chart duration.

We often look to price patterns to highlight strengthening trends (breakouts) and trend reversals.

Today we look at a unique indicator and marry it up with a long-term “quarterly” chart of the Dow Jones Industrial Average. The indicator is Equities (i.e. stocks) as a percentage of GDP.

So why is this important to follow? Because when it peaks, it tends to forecast a flat performance for the Dow Industrials… perhaps for a decade or more.

As you can see, the last two times this indicator peaked, 1968 at (1) and 2000 at (2), it lead to flat performance on the Dow Jones Industrial Average for 15 and 13 years, respectively.

This indicator is currently at its highest level in 70 years! Is this a “new normal” or something to worry about? Stay tuned!

Note that KimbleCharting is offering a 2 week Free trial to See It Market readers. Just send me an email to services@kimblechartingsolutions.com for details to get set up.

Twitter:  @KimbleCharting

Any opinions expressed herein are solely those of the author, and do not in any way represent the views or opinions of any other person or entity.

Sign up for our FREE newsletter
and receive our best trading ideas and research