Bespoke had a good piece on Friday about the 15,000 level on the Dow Jones Industrial Average. I has been a very long ride to get here. Now, staying here is another story.
In the table below, we list the first day that the DJIA closed above each thousand-point threshold from 1,000 to 14,000. Given the law of large numbers, with each thousand point threshold crossed, the percentage gain needed to cross the next threshold declines. For this reason, the amount of time that has elapsed between 14K and 15K is even more noteworthy. To get from 2K to 3K, the DJIA rallied 50% in the span of 1,560 days. To get from 14K to 15K, though, the DJIA only needed to rally a little over 7%, but it still hasn’t been able to do so after more than 2,000 days! (Emphasis Added)
In the above chart it is also interesting to note how minor the 1987 crash now looks more than 25 years later. While the drops from 2000-2002 and 2007-2009 still look daunting in the chart, we can only hope that 25 years from now the DJIA has risen enough that those declines look like nothing more than a small blip!
playing games with stats…
I find the 1000 point milestones to be a little more than meaningless to the HFT bots.
Don’t fully disagree. But they are widely-watched and have some psychological significance to factor in.
I coincide with that psycho babble to a degree, as i have heard it reiterated over and over from the masses, but does that make it correct?
Doesn’t have to be “correct” but if many market players are drinking the kool aid then it can be can edge if certain market scenarios play out.