What's in a Number?
I suppose to some,
10,000 is an event. Maybe it's the same as the way we make a big deal over round-number birthdays. What makes turning 30 any different from turning 32? Not much to most people. It's not like when you turned 16 and could drive or 21 and could drink. Most of us are more concerned with our health than with our age.
So, what makes Dow 10,000 any different from Dow 9500?
I guess we make such a fuss because it is, in historical terms, a milestone. It's not every day the Dow passes through another round number, especially one that takes it from four to five digits. With this in mind, I decided to take a look back at the last time the Dow changed the number of digits it had: when it turned 1000.
(Forgive me for not providing a long-term chart of the DJIA for this discussion. My reference chart comes from
Green Book of 35-year charts, which is not easily reproduced in this format.)
Way back in the first quarter of 1966, the Dow first poked its head above 1000, only to turn back down. This try over 1000 was the end of a great bull run that began near Dow 500, during the 1962 Cuban missile crisis. From that high, the Dow fell about 25%.
In 1968-69, it tried Dow 1000 again, only to be turned away just shy of that then-elusive number. A 40% correction ensued. Another attempt in 1972-73 almost made it to 1100 before tumbling into one of the deepest bear markets of our time.
Another attempt at surpassing Dow 1000 happened in 1976. But again, it was not to be. In the latter half of 1980 and the first half of 1981, there was yet one more unsuccessful try.
Then, finally, in the fourth quarter of 1982 -- 16 years after its first attempt at more than three digits -- the Dow went through 1000 and didn't look back.
Will it be the same this time or different? Will this first close above 10,000 be the one that takes? Or will we have to wait 16 years for a consistently five-digit Dow?
Seems to me that the only ones who really care about that round number are members of the press. Quite frankly, everyone else cares if he or she is making money or not. Now that the Dow is through 10,000, the press is making a big deal over it while the rest of us say, "How'd my portfolio do today?" -- which is exactly what our reaction ought to be. Just as we would focus on our health as we turn 50 or 60 or 70, we should focus on the health of the market as it turns 10,000.
This business is about making money, not round numbers. With the Dow having surged through 10,000, our concern should be exactly as always: Are stocks participating and is there money to be made? Let the press worry about parties for the Dow. We're more concerned with the market's health at these levels, party or not.
I do not believe the market is very healthy at these levels, and therefore I think that the move above Dow 10,000 is not sustainable at this time. We've gotten there, but it's unlikely we will stay for long.
Helene Meisler, based in Singapore, writes a technical analysis column on the U.S. equity markets on Tuesdays and Fridays, and updates her charts daily on TheStreet.com. Meisler trained at several Wall Street firms, including Goldman Sachs and Cowen, and has worked with the equity trading department at Cargill. At the time of publication, she held no positions in the stocks mentioned in this column, although holdings can change at any time. Under no circumstances does the information in this column represent a recommendation to buy or sell stocks. She appreciates your feedback at