When will the Dow make a new high?
Last month I wrote, "The Dow Jones Industrials are poised to make a new all-time high. I am likely to end the Chicken Little effort after that new high." I stand by that statement, but so far the Dow stubbornly refused to take out the high from December of 2024. Here is my performance from inception through last month.
.July 2025 Portfolio Performance
The Dow Jones Industrial Average gained 0.19% in July 2025. The Chicken Little Portfolio lost 0.74%. Through the end of July, the Dow has gained 4.55% in 2025, while the Chicken Little Portfolio has gained 0.22%
July 2025 was a neutral month for most asset classes around the world. Bitcoin gained 7.96% in the month. Year to date, gold remains the best performer, Bitcoin is rapidly catching up to gold, while US stocks and bonds have lagged. Non-US stocks are having a great year, in significant part because the US dollar has weakened.
The Dow's underperformance?
Divergence. The S&P 500 and the NASDAQ are vastly outperforming other indices. As note, the Dow Jones Industrial Average all-time high was in December of last year.
Does the divergence between the Dow, S&P 500 and NASDAQ mean something important? Perhaps.
The true divergence is between the Mag 7 stocks and all others. Market turns are often preceded by divergences similar to what we have seen. Many other indices including the Dow Jones Transportation Index have also failed. Every day that the divergence continues increases the changes that the market is at risk for a decline.
August 2025 portfolio position
No change in the Chicken Little portfolio position in July. The short position in US stocks will be covered when the Dow makes a new all-time high.
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