When the Dow closes below its December closing low in the first quarter, it is frequently an excellent warning sign
When the Dow closes below its December closing low in the first quarter, it is frequently an excellent warning sign. The December Low Indicator was originated by Lucien Hooper, a Forbes columnist and Wall Street analyst back in the 1970s. Hooper dismissed the importance of January and January's first week as reliable indicators. He noted that the trend could be random or even manipulated during a holiday-shortened week. Instead, said Hooper, Pay much more attention to the December low. If that low is violated during the first quarter of the New Year, watch out!... All but one of the instances since 1952 experienced further declines, as the Dow fell an additional 11.1% on average when December's low was breached in Q1. Only three significant drops occurred when December's low was not breached in Q1 (1974, 1981, and 1987). (VIEW LINK)