>From Peter Eliades Stockmarket cycle:
We got a few calls from the media today asking us about the
importance of 10,000 on the Dow. We answered by telling them we would tell
them the history of Dow 100, and Dow 1000 and let them be the judge of the
importance of Dow 10,000.
The Dow Industrials first closed over 100 on January 12, 1906 at
100.25 and hit a high close of 103.00 on January 19, 1906. From there, the Dow
declined 47% into 1907. It reached 100 again in 1909, in September,October,
and November of that year with a high close of 100.53, finding great resistance
at the 100 number once again. It then declined 45% into 1914, moved back to
100 again in 1916 with the month of November being completely above 100 all
month long, but there was no close higher than 110.15 on November 21. It then
declined 40%. Again in 1919 it remained just above 100 for a full year, May
1919 to April 1920, the highest close in that period, 119.62. But it then moved
down 47% into 1921. Again, the area around the 100 level provided great
resistance. Finally in late 1924, it closed decisively above 100 and kept going up
into the 1929 high reaching almost 400 on the Dow. It had taken almost 19 years
for a convincing breakthrough the 100 level after first getting above it in 1906.
How about the Dow 1000 level. 1000 was hit intra-day on a theoretical
intra-day basis on January 18, 1966 with a final high on February 9,
1966 just above 1000 at 1001.11, theoretical intra-day. The highest close in that
period was 995.15. The Dow then declined 26% in eight months. It went up
again towards the 1000 level in December 1968, but no move above, not even
intra-day. The highs in December of '68 were 994.65 intra-day and 985.21 on a
closing basis, then down 37% in 17 months. On November 14, 1972, the Dow
saw its first close above the 1000 level, six and one half years after hitting it first
time intra-day. The close was 1003.16, and it continued on for another 7-8
weeks with a high in that period occurring around eight weeks later at 1051.70
on a closing basis and 1067.20 on a theoretical intra-day basis, just above the
1000 level and then came the third largest Dow decline of the century, almost
50% down in December 1974, then up to 1000 once again in 1976, with a high
close of 1,014.79 on September 21, 1976, again failing to decisively break above
the 1000 level. It then declined 25% in March of 1978, then again back to the
1000 level
in 1980 with a reading of 1017 on November 20, 1980, then down again. Back
again over 1000 in April of 1981, just above the 1000 level, then down 25% into
August of 1982. Finally in late 1982, the Dow exceeded the 1000 level for real
and has not looked back since then. It had taken the Dow almost 17 years from
the first intra-day reading above the 1000 level to convincingly move above that
level.
The next number, of course, is Dow 10,000. That number has now been reached
almost 17 years after the 1982 low. It is happening on the worst breadth
divergences at new highs since 1929. You be the judge. Is the 10,000 level
important?....... -- Enrique Diaz-Alvarez Office # (607) 255 5034 Electrical Engineering Home # (607) 272 4808 112 Phillips Hall Fax # (607) 255 4565 Cornell University mailto:enrique at ee.cornell.edu Ithaca, NY 14853 http://peta.ee.cornell.edu/~enrique