- The Dow Jones Industrial Average ETF (DIA) is going to trigger a rare monthly buy signal at the close on January 31.
- Prior to the close on 1/31/24, this signal has only triggered 4 other times since (DIA) started trading, in 1998.
- The buy signal is a bullish monthly Price Momentum Oscillator (PMO) cross, after at least two consecutive months with a negative reading. The (PMO) is an oscillator based on a Rate of Change (ROC) calculation that is smoothed twice with exponential moving averages that use a custom smoothing process.
- The (PMO) is a slightly slower oscillator than the Moving Average Convergence/Divergence indicator (MACD) and often precedes a major trend move in the direction of the cross.
- While 4 signals is not a large sample size, it is the only available data to work with.
- Of the four prior occurrences, (DIA) was higher 12 month later, 100% of the time, with an average return of 17.31%, (full data below).
- The bullish monthly (PMO) cross, coupled with a monthly base breakout to new all-time highs, are two very strong trend buy signals.
- Disclosure: We are holding a long position in (DIA) at the time of this post.
(DIA) MONTHLY, SINCE INCEPTION IN 1998, WITH THE FOUR PRIOR SIGNALS
(DIA) BULLISH MONTHLY PMO CROSS, 7/31/03
(DIA) BULLISH MONTHLY PMO CROSS, 11/30/09
(DIA) BULLISH MONTHLY PMO CROSS, 12/30/16
(DIA) BULLISH MONTHLY PMO CROSS, 12/31/20
(DIA) PENDING BULLISH MONTHLY PMO CROSS, WILL CONFIRM AT THE CLOSE ON 1/31/24
