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The Real Reason
They Changed the Dow (DJIA)
November 1999

Was it sour grapes or s-l-o-w reflexes?! We noted in our October, 1999 HSL that the DJIA had finally reached our 11,364 target, predicted 9 months earlier on page 2 of our January issue (actual DJIA intraday high: 11,365.93 on August 24):

"US stocks? DJIA (Dow Jones Industrial Average) completed a large, bullish Continuation Head & Shoulders pattern on January 6 [see dashed lines on chart]. Target: 11,364. That's almost a 24% rally from year-end '98."

In the very next paragraph we also said:

While the DJIA is still the most widely watched market average, in '99 it'll be more important to also follow the S&P 500 Index. Why? Technology stocks, as a large group, are a big part of market leadership & will probably remain so for some time. Tech stocks are not adequately represented in the DJIA & til that changes, the S&P 500 will be at least as important as the DJIA."

No sooner did the ink dry on our October issue, the powers-that-be tried to again "juice" the DJIA by replacing so-called "Old Economy" laggards with "New Economy" turks.

Were they that upset with the preciseness of our prediction OR are they just 9 months behind in their reading & finally got around to our January issue?

Regardless, & all kidding aside, we note the November 1 DJIA changes (Additions: Home Depot, Intel, Microsoft, & SBC Communications; Deletions: Chevron, Goodyear Tire & Rubber, Sears & Union Carbide).

Will make the DJIA a more active "player," & we'll be utilizing the hopped-up DJIA for our subscriber's benefit via Diamonds (AMEX: DIA) & other strategies.

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