## JCI v Dow

January 26th, 2021

1 minute read

New admin

There’s a new administration in the White House after the recent US elections... & I’m sure many are wondering what this means for stocks in general & in particular our Indonesian stock market. So here’s a very quick analysis of the long term technical relationship between our JCI Index & the Dow. Spoiler alert, it looks like very good news.

2000s

First, a look back at the history. We start from 2002 when the ratio of the JCI divided by the Dow was just 0.04. From there we had nine fantastic years, which took the ratio first to 0.19 by 2008 & then on up to 0.34 by 2011. That’s an 8.5X out performance reward for investors who over weighted Indonesia.

Tough since 2011

Then things started to get tougher. The ratio stayed higher until 2014 & then started to fall. The decline took the ratio back to 0.3 by October 2016. From there things got dramatically worse, with the ratio falling almost in half to 0.18 by October 2020. That was the low & into 2021, we are now back up at 0.21.

50% retrace

Three interesting things are happening technically. First we have had a technically perfect 50% retrace of the previous gains (half of 0.04 to 0.34). Second we have come back to the obvious support level which was previously the resistance level in 2008. Third, we are about to cross the first significant moving average, which is the 20 months moving average.

Next stop 7,000

We’ve had a bounce off the low & next we will start to cross & turn the moving averages around. Technically we are starting another multiple year out performance vs the Dow to reward investors who bet on Indonesia. Next stop should be the 50 month average which is a 0.23. Using Dow 31,000 that means JCI heading above 7,000.

1 minute read

New admin

There’s a new administration in the White House after the recent US elections... & I’m sure many are wondering what this means for stocks in general & in particular our Indonesian stock market. So here’s a very quick analysis of the long term technical relationship between our JCI Index & the Dow. Spoiler alert, it looks like very good news.

2000s

First, a look back at the history. We start from 2002 when the ratio of the JCI divided by the Dow was just 0.04. From there we had nine fantastic years, which took the ratio first to 0.19 by 2008 & then on up to 0.34 by 2011. That’s an 8.5X out performance reward for investors who over weighted Indonesia.

Tough since 2011

Then things started to get tougher. The ratio stayed higher until 2014 & then started to fall. The decline took the ratio back to 0.3 by October 2016. From there things got dramatically worse, with the ratio falling almost in half to 0.18 by October 2020. That was the low & into 2021, we are now back up at 0.21.

50% retrace

Three interesting things are happening technically. First we have had a technically perfect 50% retrace of the previous gains (half of 0.04 to 0.34). Second we have come back to the obvious support level which was previously the resistance level in 2008. Third, we are about to cross the first significant moving average, which is the 20 months moving average.

Next stop 7,000

We’ve had a bounce off the low & next we will start to cross & turn the moving averages around. Technically we are starting another multiple year out performance vs the Dow to reward investors who bet on Indonesia. Next stop should be the 50 month average which is a 0.23. Using Dow 31,000 that means JCI heading above 7,000.