Dow Jones Industrial Average INDEX

23675.6 +82.96 (+0.35%) Sell

DJIA INDEX investors update their stop-losses higher

13 min read

Dow Jones Industrial Average ranked better than it's peers today. It delivered +0.35% to close at 23675.6. During the last week it delivered -2.85% and saw a maximum drawdown of -3.75% before bouncing back.

DJIA is currently in a bearish trend. Over the last three months 3 bearish signals have generated a profit of +2.26% for investors.


DJIA has been underperforming the SP500 index in recent time. It showed significant outperformance (compared to the SP500 index) from 23 Sep, 2016 to 9 Nov, 2018. Over the last 2 years 11 months and 14 days, DJIA outperformed the SP500 index on 59% days.

During the last three months DJIA was mostly loss making and delivered on average -0.17% per day. It's best return during this period (of +2.5%) was on Wednesday, 28 Nov, 2018. While it's worst loss in the same period (of -3.15%) was on Wednesday, 10 Oct, 2018. The longest stort-term trend during this period was 5 profitable days, which started on 27 Sep, 2018 and went on till 3 Oct, 2018. This bullish trend returned +1.67% to investors.

The last 12 months saw DJIA's investors making profits in 7 months and incurring losses in 5 months. DJIA was less consistent in delivering monthly returs than SP500 index. DJIA was also a less risky investment than SP500 index as it's worst month in the last year, Dec 2018, returned -7.29% compared to -7.75% returned by SP500 index in Dec 2018. DJIA had a shorter streak of profitable months than SP500 index. It only went up in 3 straight months during the last year. It is interesting to note that both DJIA and SP500 index significantly outperform during months when quarterly/annual results are announced.

"A big part of financial freedom is having your heart and mind free from worry about the what-ifs of life.

DJIA is currently seeing overall increase in volatility. In comparison, the SP500 index is seeing increase in volatility. During the last three months, there was a significant surge in DJIA's volatility from 21 Sep, 2018 to 11 Dec, 2018. While there was a significant surge in the SP500 index's volatility from 19 Sep, 2018 to 29 Oct, 2018.

Advanced/professional short-term investors should note that DJIA has significant positive skewness in it's return distribution. This indicates that investors can expect DJIA to recover from drawdowns quickly. Which makes DJIA a good candidate for investing on short-term bullish trends or even counter-trends hoping for a pull-back.

Investors trading in DJIA derivatives at this moment can consider 'Covered Call' options strategy to receive better risk-adjusted returns.

SP500 index has more chance of extreme outcomes than DJIA. Therefore, SP500 must receive a lower allocation than DJIA in your portfolio. SP500 index usually has shorter drawdown period than DJIA.

Based on your interest in ^DJIA you may find it interesting to know that PRQR has shown remarkable performance this year and deserves to be on every investors' watchlist.

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