chart: The Magic of 150 Months

Courtesy of McClellan Financial Publications

Refer to the following link for the full article
http://bit.ly/1O0QMgq

From the work of Tom McClellan and Peter Eliades
The basic point is that a period of 150 months (12.5 years) shows up in lots of places as the time distance between several important turning points for stock prices.  The price data in the chart this week is the log value of the monthly close of the DJIA.  Using log scaling allows us to better see the turning points without the effect of arithmetic scaling interfering with the view.
Readers should understand that this is not meant to show a 150-month cycle persisting throughout history.  Rather, it is an interesting coincidence that if you count forward by about 150 months from almost any major price turning point (high or low), you find another one, although not necessarily of the same type.  There are probably even more such relationships than just the ones shown here.
As we noted in the newsletter article, the 150-month period is related to a longer 393-month turning point pattern by virtue of the Fibonacci ratio.  Multiply 150 times 2.618 and you get 393.  Alternatively, if you multiply 393 by 0.382, you get 150.  It works backwards and forwards.

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This has been posted for Educational Purposes Only.   Do your own work and consult with Professionals before making any investment decisions.  
Past performance is not indicative of future results