Peerless Charts - 1950s 
  Peerless Stock Market Timing: 1915-2015     Explosive Super Stocks    Killer Short Sales    
  Tiger Tahiti System    Tiger Closing Power
  Example Detecting and Profiting from Pump and Dump Schemes:  2013-2014 ARWR

                                      William Schmidt, Ph.D. (Columbia Univ.)

                                                      1950s
The economy overall grew by 37% during the 1950s. At the end of the decade, the median American family had 30%
more purchasing power than at the beginning. Unemployment remained low, about 4.5%, because US factories were
busy supplying the many parts of the world that needed to rebuild from the devastation of World War II.  Eisenhower's
efforts to balance the federal budget worked to hold back inflation after the Korean War.  Personal income taxes were
high, with the top brackets paying more than 90% tax.  The movement mostly up in the stock market reflected rising
profits, low interest rates, the generally high level of satifaction felt by consumers and the growth in the government
sponsored military industrial complex.  There were bumps in the rising trend of stock prices, however.   There was a
13.5% DJI sell-off when North Korea invaded South Korea.  A mild post-Korean Was slump took place in the
second half of 1953.  A  10% DJI retreat followed a Supreme Court decision in favor of Civil Rights in the South in
the seond Quarter of of 1956 and then later in 1956 when President Eisenhower briefly turned against his Allies, Britain, France and Israel, when they sought to retake the Suez Canal by force from Egypt.  The biggest decline in the decade,
almost 20% in the DJIA owed more to the Fed's raising of interest rates than the challenge of  Sputnik in September-
October to American's sense of technological superiority. 


  1949-1950   
The Federal Reserve kept interest rates very low in this period.  The Discount Rate remained steady at 1.5% from September 1948 until July 1950.  Reflecting an increase in the rate of inflation, the FED raised the Discount Rate to 1.59% in August
and then to 1.75%, where they stood steady until early 1953. 

The year-long bull market from June 1949 to June 1950 ended abruptly when North Korea troops invaded South Korea on June 25th.  The next day the DJI dropped like a rock, falling 13.5% in three weeks.  The decline was not entirely emotional.
Traders expected what followed, namely that the US and other nations would send in troops to rebuff the attack but economically, more important, Inflation would cause increases in taxes and challenges to "free enterprise".  But war also meant bigger profits.  Truman quadrupled the military's budget and within 7 months of the outbreak of the war,  prices in the (measured by the CPI) surged by almost a 20%.<1>   The response by President Truman and Congress was to raise taxes and to to impose price controls. 

Our Peerless chart gave a series of momentum-based Buy signals as the DJI roared upwards between Juna 1949 and
1959.  Truman, the Democratic President, dropped his anti-business rhetoric and even declared himself in favor of
a balanced budget.  Meanwhile, a post war boom in cars, TVs and consumer goods coupled with lots of orders from
overseas boosted profits and the stock market.   The Sell S8 warned traders that the NYSE A/D Line was no longer
making new highs.  The DJIA was getting too far ahead of the rest of the market.   On June 12th, two weeks before
the Invasion, our Peerless system came extremely close to producing an Sell S9-v.   The DJI closed on this day 2.7%
over its 21-day ma with our V-Indicator a -50.  Immediately a bearish head/shoulders top formed.  These patterns
have a long history of bringing unexpected bad news to the market.  Someone always seems to know or sense what
is coming.  In this case, it was the Soviet Union (Stalin).  The invasion was paid for with Soviet loans and arms building
expertise.  It seems unlikely that the CIA did not get an advance sense of the North Korean preparations for the Invasion.

The market's decline bottomed out with the North Korean capture of Seoul.  The recovery reflected Wall Street's
realization that the new Korean War would probably not lead to war with the USSR and would bring new profits
to US steel-makers and others, just occurred in World War I and World War II.

Signals: Momentum-based Buy B18 and Buy B21.
            B13 - Expect a "Santa Claus" rally.
            B10 - Breakout above flat, well-tested resistance.
            Sell S8 - new high not confirmed by A/D line making a corresponding new high.
             
                                                                                                                                                               6/12/1950     
                                                                                                                                                         Almost S9-V at peak
                                                                                                                                                         la/ma=1.027 and V=-50

  
1950

Sept 12 - North Korean troops reach their farthest point of advance, the perimeter of the port of Pusan. But its army's
strength has been nearly cut in half and it is almost entirely lacking in armor.   Sept 15 - UN forces achieve a sudden reversal
of fortunes with a massive amphibious counter-assault at Inchon.  The bulk of the North Korean army were destroyed
as UN troops moved into North Korea and in October approached the Yalu River and China.   It was at this time that
the Chinese People’s Volunteers Force troops crossed into North Korea and inflicted serious losses on the lead units
of the UN advance and soon the main body of the U.N. forces were in full retreat.  On January 4th, Seoul is recaptured
by North Korea.  Wall Street's response to the war became mostly technical by the end of 1950.  The DJI bounded
back and forth between the upper and lower band.  There were no sell signas, only a variety of Buy signals at the lower
band.



  
1950-1951
A batch of Peerless buy signals, reflecting bullish internal rstrength, brought a breakout in the DJI as the new year started There was a brief pullback to 65-dma (purple) but it stoped in May and the DJI made a June top which was signalled
by a Sell S9-v on April 30th.  A head and shoulders (H/S)  top began to appear, but the neckline was not broken.  In April
tensions in Washington D.C. became particularly frightening when a hero of the political right, General Douglas Macarthur,
was fired for insubordination over his refusal to prosecute a limited war in Korea.   The General had used "extreme prejudice"
to break up the American veterans' Bonus Army in 1932 and was known for advocating a policy of dropping nuclear weapons on North Korea and China in 1950 and 1951.

The DJI's broad (red-circled) Head/Shoulders (H/S) did not break down.  Instead. it turned up at the combined support
of its H/S "neckline" and the DJI's rising 200-day ma.  General MacArthur chose the "fade away" rather than fight.  And
on July 10th a talks between the UN and Communist forces.  This brought a "relief: rally even though fighting continued
for two more years.

                                                                                         4/30/51    la/ma=1.024 
                                                                                                    V-I = -23

  
1951
                                                 Events

January 27 – Nuclear testing at the Nevada Test Site begins with a 1-kiloton bomb dropped on Frenchman Flat,
northwest of Las Vegas.
March 14 – For the second time, United Nations troops recaptured Seoul.
March 29 - Ethel and Julius Rosenberg are convicted of conspiracy to commit espionage. On April 5 they are
sentenced to receive the death penalty
March 31 – Remington Rand delivers the first UNIVAC I computer to the United States Census Bureau.
April 7 - Operation Greenhouse: The first thermonuclear explosion is carried out on Enewetak Atoll in the Marshall Islands
of the Pacific by the U.S. Three more tests follow, the last taking place on

July 11–12 –  Cicero race riot of 1951: A mob of 4,000 whites attack an apartment building housing a single black
family in a neighborhood in Cicero, Illinois.  As in 1919 and 1967, race riots actually seem bullish to Wall Street.

September 8 - 48 nations sign a peace treaty with Japan to to formally end the Pacific War. 
                     - A Japan-U.S. Security Treaty is signed which lets American military forcs to be stationed in Japan.

The NYSE A/D Line breaks its uptrendline and the DJI again falls back and finds support at its rising 200-day ma
in November, a month that is often a good time to buy December usually advances.

Signals:  B2 - Buy near lower 3.5% band below the red-21 day ma
             S4 - Sell after a 10% rally when the Accumulation Index drops below its 21-dma
             B17 - Buy on weakness near the 3.5% lower band when the internal strength indicators are not falling.
             B13 - Buy for a Christmas rally after December 16 provided the DJI is not much above its 21-dma.

 
  1951-1952

  The chart below shows flat (red) resistance to have been tested 5-6 times, depending on how perfectly
  one wants the reach the resistance-line.  The flat (green) support shows 5 successful test. 

 
1952     Events

February 6 – In the United States, a mechanical heart is used for the first time in a human patient.March 29 – U.S. President Harry S. Truman announces that he will not seek reelection. 

April 8 – Youngstown Sheet & Tube Co. v. Sawyer: The U.S. Supreme Court limits the power of the President to seize private business, after President Harry S. Truman nationalizes all steel mills in the United States, just before the 1952 steel strike begins.

June 14 – The keel is laid for the U.S. nuclear submarine USS Nautilus.

July 19–26 – Washington D.C. UFO incident. Several alleged UFOs tracked on multiple radars. Jets scramble on several occasions and the objects take evasive action, only to return after the jets leave the area.

September 2 – Dr. C. Walton Lillehei and Dr. F. John Lewis perform the first open-heart surgery at the University o

November 1 – The United States successfully detonates the first hydrogen bomb at Eniwetok Atoll in the Marshall Islands
It has a yield of 10.4 megatons.

November 4 - Former General Dwight D. Eisenhower and President of Columbia University wins the 1952 Presidential Election in a landslide over Governor Adlai Stevenson.  The Democrats wanted him for their nomination.

November 29 –  U.S. President-elect Dwight D. Eisenhower fulfills a political campaign promise, by traveling to Korea
to find out what can be done to end the conflict.

Signals:
           Buy B11 - The NYSE A/D Line fails to confirm a minor DJI new low.
           Sell S10 - Minor neckline support is broken.  The height of the H/S pattern sets up a minimum downside
           targets that is is the height of the pattern dropped down from the point of breakdowm.
           Buy B4 - DJI rallies above 3.0% upper band with much improved internal strength.
           Sell S16 - DJI rallies in late December or early January on volume that is low considering the bullishness
           of normal Santa Claus rallies.

           A rally leading into the Presidential Election and afterwards is quite common.  It gives expression to
           the excessive exhurerance of the partisans who have won the Presidential Election.
         

  
1952-1953

  
1953                                        Events

January 19 – Showing what sort of news/events dominated the attention of most Americans in early 1953,
68% of all television sets in the United States are tuned into I Love Lucy to watch Lucille Ball give birth.

What events took place at the market bottom in June and July 1953?  Most important, the Korean War ended its
fighting on July 27 and prisoners of war were repatriated in August.  No formal peace treaty was signed..

June 17 - Soviets crush protest by East German workers about 10% increase in production quotas
which turn into demands for free elections.  Soon afterward DJI rallies 4%.

June  19 – The U.S. executes Julius and Ethel Rosenberg for spying for the USSR.

June 30 – The first Chevrolet Corvette is built at Flint, Michigan.
July 28 – Burger King opens its first restaurant in Jacksonville, Florida.

August 5 – Operation Big Switch: U.S. prisoners of war are repatriated after the Korean War.

August 19 –  In "Operation Ajax") – The CIA helped to overthrow the democratic government of Mohammed Mossadegh
in Iran leaving Shah Mohammad Reza Pahlavi on the throne to be ruler and despote.  Mossadegh had made the mistake
of nationalizing British Petroleum in Iran.  Imperialistic interests on Wall Street clearly dominated the CIA and
State Department under Eisenhower.

October 30 –  In secret, President Eisenhower formally approved a top secret NSC document (162/2) stating that
United States' arsenal of nuclear weapons must be expanded to counter the commnist threat.

                                                         No Post-War Slump

The end of World War I and World War II brought significant sell-offs.  Traders may have expected one
after the end of the fighting in Korea.  The DJI did pull-back a little, but Peerless detected enough signs
of internal strength to give a series of Buys  from June to December.  Soon the Eisenhower bull market
started.  From the bottom at 257 in September 1953, the DJI raliied up to highs of 540 in 1956 and 1957.
Warren Buffet called this rise of more than 100% in the DJI, "the bull market that no one remembers"


  
  1953-1954

                                             The FED Took Over The Wall Street Show.

Credit the Federal Reserve as much as anyone with the +100% Eisenhower Bull Market of 1953-1956.   From  February 1953 until January 1954, the Discount Rate had been kept at a  low rate of 2.0%. On February 1954, the FED dropped the Discount Rate further to 1.79%.  It did this as the DJI was making new all-time highs.  This is exactly reminiscent of what the FED did in mid-1927.  In both cases, the result was the same: a very strong advance.  See in our chart below the five bullish momentum signals at this time.  See how the P-Indicator surged to a new high, as did the A/D Line.  Note also how our Accumulation Index rose into very positive territory and stayed there until June.  "Big money" was very bullish.  The FED then continued to provide "easy money" for the wealthy to play the market. It lowered the discount rate to 1.75% in March, to 1,6% in Aoril and a easly 1.5% in May 1955.  There it stood until April 1955 when they began slowlu rising it.


  
1954

January 25 – The foreign ministers of the United States, United Kingdom, France and the Soviet Union meet at the Berlin Conference.

February 10 – After authorizing $385,000,000 over the $400,000,000 already budgeted for military aid to Vietnam, U.S. President Dwight Eisenhower warns against United States intervention in Vietnam.

February 23 – The first mass vaccination of children against polio begins in Pittsburgh, Pennsylvania.

March 1 - U.S. officials announce that a hydrogen bomb test has been conducted on Bikini Atoll in the Pacific Ocean.

March 9 – Journalists Edward Murrow and Fred W. Friendly produce a 30-minute See It Now documentary, entitled A Report on Senator Joseph McCarthy.

April 1 – President Dwight D. Eisenhower authorizes the creation of the United States Air Force Academy in Colorado.

April 7 – Dwight D. Eisenhower gives his "domino theory" speech during a news conference.

April 16 – Vice President Richard Nixon announces that the United States may be "putting our own boys in Indochina regardless of Allied support."

April 22 – Senator Joseph McCarthy begins hearings investigating the United States Army for being "soft" on Communism.

May 7 - French lose a decisive 7 week battle with Viet Minh and their colonial grip over S.E. Asia suffers a severe blow.

May 14 – The Boeing 707 is released after about two years of development.

May 16 – National Educational Television is launched on cable TV. It will become PBS on October 5 1970.

May 17 – Brown v. Board of Education (347 US 483 1954): The United States Supreme Court rules that segregated schools are unconstitutional.^.

June 17 – A CIA engineers a military coup occurs in Guatemala.  June 27 – Guatemalan President Jacobo Arbenz Guzmán steps down, thus triggering a bloody civil war that continues for more than thirty-five years.

July 19 – Elvis Presley's first single, "That's All Right", is released by Sun Records (recorded July 5 in Memphis, Tennessee).

September 16 – Lewis Strauss, chairman of the United States Atomic Energy Commission, in a speech to the National Association of Science Writers claims: "It is not too much to expect that our children will enjoy in their homes electrical
energy too cheap to meter".

October 18 – Texas Instruments announces the development of the first transistor radio.

November 12 – The main immigration port of entry in New York Harbor at Ellis Island closes.

November 23 – The Dow Jones Industrial Average rises 3.27 points, or 0.86%, closing at an all-time high of 382.74.

December 2 -  The U.S. Senate votes 67–22 to condemn Joseph McCarthy for "conduct that tends to bring the Senate
into dishonor and disrepute."

December 4 – The first branch of Burger King opens in  Miami. 

December 23 – The first successful kidney transplant is performed by Joseph E. Murray, MD in Boston from one identical twin to his brother.

  
1954-1955

   
1955

January 22 – The Pentagon announces a plan to develop intercontinental ballistic missiles (ICBMs) armed with nuclear weapons.