From a guy named Lee Wheeler, who is a real genius with historical trivia:
“Unlike some folks here, I have no idea if the market will break out here, break down, remain in a range, etc.
All I know is that we are situated at the most important price inflection levels in five years.
However, if the market were planning to decline later on down the road, this sort of strength into July (and possibly August) is exactly what you’d expect to see, especially in a “7” year like 2007.
In fact, making new annual highs into Jul/Aug is one of the hallmarks of a future “7 year” selloff. At least that’s been the case over the past 100 years or so. And the Dow has actually made its high for the year in Jul/Aug in seven of the ten occurrences.
Believe it or don’t, the Dow has finished the year lower than where it was on August 1 in every “7” year since 1907 (except for 1927). And unlike recent years, there have been no 4Q bailout rallies.
Will 2007 be different? Guess we’ll find out soon enough.
1907: 45% Dow Jones waterfall decline from Jul-Nov. Rich Man’s Panic.
1917: Dow Jones waterfall decline Jul-Nov.
1927: Dow topped for year in early Oct. Fell 11%.
1937: Dow topped for year in mid-August. Waterfall decline from Aug-Nov.
1947: Dow topped for year in late July. Fell 8% and traded in a range thru year-end.
1957: Dow topped for year in mid-July. Waterfall decline into Dec.
1967: Dow topped for year in late Sept. Fell 13% into Nov.
1977: Dow topped for year in Jan. Fell all year.
1987: Dow topped for year in late Aug. Crashed in Oct.
1997: Dow topped for year in early Aug. Fell 16% into Oct.”
