By James Dines, The Dines Letter
It has taken us decades to think out some of the market's deepest and most-elusive secrets, culminating in the 64 Dinesisms and other principles laid out in your editor's book Mass Psychology and the Video Instructional. We have also recommended MacKay's book Extraordinary Popular Delusions to be read alongside Mass Psychology, its modern version. Some of our principles fly in the face of the so-called "consensus" and "current wisdom." For example, MacKay's work, and also Humphrey Neill's "Theory of Contrary Opinion," led us toward the Dines Theory of Positive Negativism (Dinesism #12, DITPON).
Specifically, TDL has been writing about the unusually frequent declines in Octobers, a phenomenon of which the public first really became aware only in the 1980s, but these days is widely bruited on business TV. Yet, even now the Mass still has it wrong: declines usually end in Octobers, which is why TDL has always called it "the bear-killer month."
For the record, we note that there is now not even the slightest public awareness of Dinesism #29 (DINPIVOT) discussed in the Mass Psychology book and the most important "rule" in the stock market is that there are no rules. However, there are guidelines, which is all that Dinesisms are, playing percentages like any good poker player, better than nothing in the trackless wilderness of hauntingly-lonely, being-first, stock-market forecasting.
Stocks: Since 1950, we count that the Dow in 55 Octobers have been up 32 times (58%) and down 23 (42%). As noted above, we baptized Octobers (beginning the fourth quarter of the calendar year) as "bear killers." The up months were very significant indeed. October has been the upturn point after fourteen bear moves: 1946, 1957, 1960, 1962, 1966, 1974, 1987, 1990, 1992, 1997, 1998, 1999, 2000 and 2002. In the year 2000 for example the DJI hit bottom on 18 Oct at 9,655, a classic as it subsequently rose by 1,380 points through Fed 01. To this day the Dow's Bottom at 7,917 on 10 Oct 02 still stands. Since then, it has risen 53% (3,788 points) to 10,984.50.
Precious Metals: For the past 24 years, both the Dines Gold Stock Average (DIGSA) and Dines Silver Stock Average (DISSA) have been bearish in Octobers, 83% and 75% respectively. DIGSA was up 4 and down 20 times, while DISSA was up 6 and down 18. Octobers are usually around a good time to buy on declines, before golds' seasonally bullish first quarter. Nonetheless, gold producers are now still in Uptrends this September.
Editor's Note: James Dines is editor of The Dines Letter, P.O. Box 22, Belvedere, CA 94920, 1 year, 17 issues, $195. Dines, "The Original Uranium Bug," has been bullish on uranium all the way up and is in no hurry to take profits. In his current issue, Dines identifies companies that are in major uptrends and picks one uranium stock that he believes will soar to unbelievable heights. To view The Dines Letter offer click here.
