As noted by B.I.G. below, the DOW fell a massive 11.5% in February as 68% of the trading days ended in losses. This was much worse than January's results. Although conditions seem oversold, not once in the past 25 years has the following month been positive when over 2/3 of the trading days in the previous month have been negative. Therefore, the odds seem pretty good that March will end up being another month of losses for the DOW. With gold trading inversely to the DOW lately, March should be bountiful for the rest of us.

Regards - VHF

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Another Tough Month

B.I.G.

February 27, 2009

And investors thought January was a bad month! The Dow is currently down 11.5% for the month of February, which even drwarfs the horrible decline of 8.83% in January. CNBC anchors have even been calling today an "impressive" day for stocks with all of the bad news that has come out. Only in this market can a decline of 2.36% on the day be called "impressive."

It's been a very tough month for the market to book one-day gains. Since 1900, there have now been 46 months in which the Dow went down on more than 2/3 of the month's trading days (3.5% of all months). Below we highlight these months along with the Dow's change in the following month. As shown, there have only been 4 such months in the past 25+ years where this occurred, and the following month was negative every single time.