Bloomberg Anywhere Remote Login Bloomberg Terminal Demo Request


Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.


Financial Products

Enterprise Products


Customer Support

  • Americas

    +1 212 318 2000

  • Europe, Middle East, & Africa

    +44 20 7330 7500

  • Asia Pacific

    +65 6212 1000


Industry Products

Media Services

Follow Us

Bloomberg Customers

Dow 10K: Why One Pro Thinks It’s Important

Posted by: Ben Levisohn on October 14, 2009

The Dow Jones Industrial average closed above 10,000 today for the first time since October 2008. After having watched the blue-chip benchmark cross the magical five-digit figure numerous times in both directions over the past 10 years, the predominant reaction from market watchers has been a collective shrug.

Barron’s urged its readers to “Tune Out Dow 10,000 Maniacs.” The Wall Street Journal spent its time focusing on an impending Standard & Poor’s 500-stock index milestone. Even BusinessWeek has asked if Dow 10,000 is just another number.

They’re right to be skeptical. Too much is made of the psychological impact of round numbers, whether its Dow 10,000 or S&P 500 1100. Technical analysts rarely focus on the Dow — with only 30 stocks, it’s too narrow to be of much use. And when they do, they focus on trends (the Barron’s article focuses on when long-term and short-term trends in the Dow clash) or levels of support and resistance.

But to dismiss Dow 10,000 outright is mistake, says Blaze Tankersley, senior managing director at BayCrest Partners, an independent brokerage. He notes that when the Dow has traded near 10,000, it’s stayed there for months, sometimes years. Starting in 1999, the Dow spent nearly three years stuck in a range with 10,000 as its base, before crashing through in 2001. On the way back up, it traded around 10,000 for around two years before trading up to 14,000.

“Anyone who thinks this is irrelevant is likely a fool,” says Tankersley. “[Dow 10,000] magnetizes prices towards it for many months if not years to come once [it’s breached].”


TrackBack URL for this entry:

Post a comment



Businessweek’s Emily Thornton, Amy Feldman, Ben Levisohn, and Ben Steverman focus on matters great and small for investors, from the views of a hot fund manager to an explanation of the latest products devised by Wall Street’s rocket scientists. Exploring trends in any area, from bonds and stocks to closed-end funds and futures, always with an eye towards giving investors a better understanding of the sometimes confusing and often chaotic world of finance. Standard & Poor’s senior index analyst Howard Silverblatt will also provide his take on companies’ finances and the markets. Voted one of the “Top 100 Finance Blogs” in 2007.

BW Mall - Sponsored Links

Buy a link now!