Dow 10,000, We Hardly Knew Ya!
By Barry Ritholtz - October 16th, 2009, 10:15AM
Pardon me for saying so, but really, Who TF cares?
Its a meaningless number, without any impact technically or quantitatively. Its no surprise that the Dow did not hold over 10k for very long. Its been over 26 times, starting in 1999. And hear it is, 10 years later — zero progress.
Why anyone — other than tv producers and silly hat manufacturers — cares about D10k is quite simply beyond my comprehension . . .
>
HELLO AGAIN !
>
The chart above fails to capture the 26 times the market has traded thru 10k . . .
October 16th, 2009 at 10:27 am
Barry: So it is safe to say you won’t don the one offered you the next time you’re over at CNBC? It would make a great cover shot for Bailout Nation: Part Deux.
October 16th, 2009 at 10:31 am
None of it matters any longer- soon there’ll be free gold for everyone! (bacteria will cost ya, tho)
http://incakolanews.blogspot.com/2009/10/shock-ikn-discovers-interesting-gold.html
October 16th, 2009 at 10:37 am
Think positive now…we all must think positive. “It is a question of confidence you know and has nothing to do with the real economy.” So say that work on wall street and washington.
October 16th, 2009 at 10:44 am
Put those hats back in the closet! But bring them out every time it crosses again. Could be a fun little game.
October 16th, 2009 at 10:51 am
Dow 10k? Not hardly. The Dow 30 Industrials of 1999 are nothing like the basket of 2009. There have been ~11 changes in the Dow since first hitting this level. Interestingly, a rough look shows even with dogs like Kodak the Dow would be higher had it stuck with those old economy listings. Again, as if it matters.
October 16th, 2009 at 10:53 am
This is old now but it is funny, was brought up in the EWI daily update earlier in the week:
“According to Jim Bianco today (BiancoResearch.com), the financial media was pretty worked up about DJIA 10,000. The index first pushed above 10,000 on March 29, 1999, 10½ years ago. Jim notes that since then, it closed above the 10,000 level 1,859 times.”
October 16th, 2009 at 10:58 am
DOW 10,000 might, strange as it seems, be like DOW 1,000 was for twenty years (early 60’s- early 80’s): something that just couldn’t be passed.
October 16th, 2009 at 11:00 am
Dow1k from 1966-1982 = 16 years
October 16th, 2009 at 11:01 am
Signs of “green shoots,” heeeheee…
http://www.boston.com/sports/baseball/redsox/extras/extra_bases/2009/10/good_seats_stil.html
“The Yankees are in the ALCS for the first time since — ahem — 2004. But Yankee Stadium may not be sold out tonight for Game 1 against the Angels. That would be embarrassing for the business side of the organization.
Whether it’s the economy or the outrageous ticket prices, there were still 6,000 seats available as of last night through the team. Just a few minutes ago, to see what was out there, I pulled up four tickets on Yankees.com for section 221. OK, so they were $431 each. But they were there.”
HCF
October 16th, 2009 at 11:03 am
@HCF: Wow, that IS bad. We’re talking about the Yankees here, but they’re getting what they deserve. Pricing tickets that high for any sporting event is just absurd, obscene even.
October 16th, 2009 at 11:13 am
10,000 is just a number. I think we love predictions because if we make predictions, and/or concoct explanations for those events we predicted wrong, then we won’t feel like victims of randomness. We feel more in control. But are we more in control or just intoxicated by some illusion of control?
It is tough to make predictions, especially about the future. – YOGI BERRA
http://viewpointsofacommoditytrader.com/419/suckers-for-prediction/
October 16th, 2009 at 11:14 am
Cigars and cocaine for everybody, it’s 1999
http://www.thedailyshow.com/watch/thu-october-15-2009/dow-jones-rebounds-to-1999
October 16th, 2009 at 11:20 am
But – But Isn’t DOW 10,000 and indicie? That is one less sign to follow
But you can still get your “The Indicies Will Lead The Way” Lapel pin
October 16th, 2009 at 11:21 am
Evert time it crosses 10k, looks like Dow flirts around 10k for some time.
October 16th, 2009 at 11:24 am
OT:
BR,
btw, how’d the CMRE confab go?
learn anything interesting?
October 16th, 2009 at 11:35 am
@Mannwich:
Schadenfreude is in order here, as I hate hate hate the Yankees. They are the sporting equivalent of the homeowner that does not acknowledge that their house won’t sell for what it would have in 2006/07… I hope the Angels crush them…
HCF
October 16th, 2009 at 11:40 am
@HCF: Being from Boston, I hate them as well. Of course, they’ll probably win it all, but it will very enjoyable to see all the empty seats. It’s really a crime against their great fans to charge so much for tickets.
October 16th, 2009 at 11:40 am
HCF
The weather may have something to do with the empty seats, 40 degrees and rain, it’s just been miserable in the last 2-3 days.
October 16th, 2009 at 11:43 am
@beaufou: No way, man. We’re talking about the YANKEES here. The weather always sucks this time of year. That’s the normal weather for mid to late October. Trust me, it ain’t “the weather”. The weather was HORRIBLE in ‘04 in nearly all the games when the Sox came back from 3-0 to beat them. I can’t recall a time when the Yankees didn’t easily sell out a postseason game of any kind, so it’s not the weather. It ain’t Southern Cal. It’s arguably the baseball capital of the world.
October 16th, 2009 at 11:46 am
Um, guys, the Phils are going to win the series again. Come on!
October 16th, 2009 at 11:48 am
Maybe Jay-Z could help the Yankees somehow, he claims on Blueprint 3 to have made the cap more famous than a yankee did.
Throw the diamonds up!
Maybe Jay-Z is a little out of touch though these days….
October 16th, 2009 at 11:48 am
@ben22: I’d be OK with that. Anyone but the Yankees.
October 16th, 2009 at 11:48 am
@beaufou:
It’s OCTOBER baseball… the freakin’ ALCS. If the Sox were in it, Fenway would be completely sold out, even if it were 10 degrees and snowing. If Fenway were 60,000 seats instead of ~35k or so, the story would be the same. There should be no excuse for a proud, historic franchise like the NYY having an empty seat at this time of year. Especially, now that Wall Street is raking in the bonuses again…
HCF
October 16th, 2009 at 11:52 am
@ben22:
The Phillies definitely have a great chance, especially with their filthy left-handed pitching (plus I always have a soft spot for Pedro). As long as Lidge has his head screwed on straight, they’ll be ok.
Even if the Yankees win it all, I’d be happy if A-Rod 0.120 with 0RBIs from here on out…
HCF
October 16th, 2009 at 11:54 am
btw, Barry…
I didn’t mean to hijack this thread and make it into an October baseball extravaganza! I just couldn’t help myself when I saw all the Yankee “green shoots” out there…
HCF
October 16th, 2009 at 11:57 am
Jeff,
you mean, you weren’t Shorting the Bostonians?
btw, did you notice that the ‘dollar’ that was buried beneath Home Plate, in the HHH Metrodome, was a G-7 variant for the Chicago FedRes? It isn’t like Minneapolis is bereft of FedRes outposts..
That’s some kind of Stoopid~
October 16th, 2009 at 11:57 am
HCF and Mannwich
Oh well, nevermind, I’m not truly a baseball person, although I remember the SOX games.
I guess I would have a hard time understanding empty seats at the world cup knock out stage if I could reference it.
October 16th, 2009 at 12:02 pm
@Hoffer: Are you serious? I did not notice that, although they should probably re-think this lack of a retractable roof at the new place next year. The weather since October hit has been nothing short of miserable. Could probably play games on only a handful of days. I guess a billionaire owner couldn’t afford the extra $150MM if it wasn’t OPM.
I should have shorted the Sox this year. Not their year. Need to retool. I went to Games 1 and 2 in Anaheim. Those folks really rubbed our noses in it. We had it coming, I guess.
October 16th, 2009 at 12:19 pm
Jeff,
maybe they were betting on “Global Warming”?
more seriously, Stadium financing is a bad joke.
and, to your point, it isn’t like these things haven’t been around http://www.takenaka.co.jp/takenaka_e/majorworks_e/topics/2001/win/01-2.html
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Lightweight+Retractable+Membrane+Roof+
also, if that Yankees ticket pricing wasn’t an example of ‘bubble mentality’, I’m not sure what is..
October 16th, 2009 at 12:21 pm
If we played 154 games per year, the way God intended, nobody would have to worry about snow..and if the AL played the NL…it would make the year mean something. If the Marlins win as wild cards…who was better? The 7 gamers or the 162 gamers? And please don’t tell me you now watch anything but the series itself…next thing you know you’ll be telling me you actually watch regular season NBA games…
If you can extend the season and Sell Tickets and You are the Owner…ok…if not you are just playing in their world…
October 16th, 2009 at 12:22 pm
@Hoffer: Stadium financing is just another thing that “We the Sheeple” accepts because it hits all the right (or wrong) emotional “hot buttons”. It’s a sad spectacle to watch. The Vikings are at it again as well, implicitly threatening to move to LA if they don’t get what they want. The mass extortion (on many levels) of the public goes on.
October 16th, 2009 at 12:28 pm
Just laid off from my job of 7 years (life in the architectural world is NOT good nowadays.)
Looks like I will be an NFP stat in a couple weeks!
The DOW will catch up to the reality out here soon enough.
October 16th, 2009 at 12:30 pm
Sorry to hear that Paul S. Tough times for a lot of people.
October 16th, 2009 at 12:30 pm
Jeff,
see OvisSuburbanus.com – We the Sheeple
from http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=We+the+Sheeple
thought that was funny..
and, with this http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=Stadium+Financing we’ll find another Topic that Nader is/was correct about..
little wonder why activities like this http://www.pdga.com/ are growing..
October 16th, 2009 at 12:35 pm
Sorry to hear about that, Paul.
October 16th, 2009 at 12:49 pm
DOW 10,000 important because, its a round number and people tend to reconsider their positions at these levels, i.e., take profits or sell more. Also, b/c as the chart with the circles shows it is a support/resistance area…
October 16th, 2009 at 12:50 pm
oh yeah, go YANKEES, and for that matter the GIANTS and RANGERS…
October 16th, 2009 at 1:04 pm
Taibbi’s latest in Rolling Stone. BR – might want to put this in your links post?
http://www.rollingstone.com/politics/story/30481512/wall_streets_naked_swindle/2
October 16th, 2009 at 1:04 pm
Paul – I’m sorry to hear that
October 16th, 2009 at 1:12 pm
10,000 is a nice round number.
October 16th, 2009 at 1:17 pm
Sorry for the OT, Barry, but after reading Taibbi’s latest, it’s hard not to come to the conclusion that the entire system is a complete sham designed to fleece the sheeple. I would love to get other peoples’ opinions on this.
October 16th, 2009 at 1:24 pm
I am short financials and long DOW 10,000 hats.
October 16th, 2009 at 1:32 pm
Whether it’s the economy or the outrageous ticket prices, there were still 6,000 seats available as of last night through the team
————-
Who cares about filling up the seats. That’s petty change.
As long as they have that Goldman sponsorship, the stadium could be empty and they’d be fine.
October 16th, 2009 at 1:33 pm
@danm: Maybe the Yankees should just have a private showing of the games in front of Goldman employees? That might net them even MORE money. Forget the rabble. Who cares about them anyway?
October 16th, 2009 at 1:38 pm
@ Mannwich:
But we’re just jealous.
October 16th, 2009 at 1:40 pm
@danm: Um, no I’m not. I’m sure you’re not either. I AM pissed though.
October 16th, 2009 at 1:48 pm
Jeff,
see: How Our Schools Create Sheeple
Why most Americans are unable to perceive
and protest America’s slide into fascism.
By John Kaminski
In 1896 the famous John Dewey, then at the University of Chicago, said that independent, self-reliant people were a counter-productive anachronism in the collective society of the future. In modern society, said Dewey, people would be defined by their associations”not by their own individual accomplishments. In such a world people who read too well or too early are dangerous because they become privately empowered, they know too much, and know how to find out what they don,t know by themselves, without consulting experts. — Kurt Johmann, quoting John Taylor Gatto ..
http://www.proliberty.com/observer/20030114.htm
Perhaps the greatest of school’s illusions is that the institution was launched by a group of kindly men and women who wanted to help the children of ordinary families—to level the playing field, so to speak.
http://www.johntaylorgatto.com/
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=John+Taylor+Gatto+
October 16th, 2009 at 1:49 pm
the MLB salary structure is grossly unfair. when a team like the yankees can outspend the 2nd highest salary team by $70 million and all they get is some negligible ‘luxury’ tax it’s a sham. the money the small and mid market teams get as socialized welfare is nowhere near enough to compete with the bigger markets. what would be more fair and put more focus on the talent development and ingenuity of the teams themselves would be a setup similar to the NFL. this will never happen because professional sports is about making the most money first and the yankees sure generate a lot of that.
October 16th, 2009 at 1:51 pm
@ Mannwich:
I was joking. Every time somebody complains these days, it’s because they are jealous.
October 16th, 2009 at 1:51 pm
@danm: Oh, I know you were. I was just reiterating the point.
October 16th, 2009 at 1:53 pm
I care because you need to get through 10k on our way to 11,500 by EOY.
October 16th, 2009 at 1:58 pm
@Rikky:
I’m a Red Sox fan, so I can’t complain too much about the financial structure of baseball, but I do have to say I feel bad for fans in towns like Kansas City, Pittsburgh, and Cincinnati, which have historically been great baseball cities, but which have each fielded sucky teams for more than a decade. I would say that any “luxury tax” system in baseball should also necessitate salary floor rules. That way, subsidies from high spending teams (NYY, NYM, BOS, LAA, LAD, CHC, etc.) would not go into owners’ pockets, but rather to field better teams in smaller markets.
How come this discussion reminds me of TARP money being hoarded by banks to enhance capital ratios and pay out bonuses, rather than lent out?
HCF
October 16th, 2009 at 2:05 pm
And after 11,500 up up and away.
October 16th, 2009 at 2:07 pm
Yeah, but look at that inverted H&S–to the moon.
October 16th, 2009 at 3:33 pm
Sorry to hear about that Paul. Hope your transition is as painless as possible, quick, and results in a new adventure! Hit the gym first thing tomorrow morning. Have an adult beverage tonight.
October 16th, 2009 at 4:16 pm
@ Paul S…as it’s been said before, freedom’s just another word for nothing left to lose…but it can be damned exhilarating…even if it comes because of a job loss. Use the time to figure out what all this shit means, and how you fit into it, and turn in a new direction, if that’s where the musings lead. Don’t worry about money too much. You live in the US of A. We print it for free here.
Yuck the Fankees. And I don’t even care about baseball. Down where I live, it’s all about college football. Even when my team (Alabama) sucks, like it often has until recently, they’d sell out that stadium every weekend. You can’t get season tickets without giving the school about $10,000 a year, and that’s more than I paid for tuition, and even at that, it wasn’t much worth it.
October 16th, 2009 at 5:32 pm
Am I the only one who sees it? What do you mean D10K means nothing? I see major resistance/support there! Just look at the chart. That means that it is a serious psycological veriable.
October 16th, 2009 at 7:58 pm
Who the F cares about the Dow anyway. . . weak index with 30 “blue chip” particicpants that are so “blue chip” that we had to replace a third of them in the last decade? WTF? Survivorship bias anyone? I follow the S&P because it is much broader and more representative of reality, however, if more covereage came upon the Total exchange traded indices, those would probably be the best to follow. At least i can spell that word.
That Said, Bruce, I hope Tebow makes Saban very, very sad in Atlanta. My second prediction (in the same post as GM BK last year) was Gators undefeated championship season and Tebow wins his second Heisman. If that comes true, then I’ll still be happy. (although probably unemployed and broke as well).
October 16th, 2009 at 7:58 pm
Who the F cares about the Dow anyway. . . weak index with 30 “blue chip” particicpants that are so “blue chip” that we had to replace a third of them in the last decade? WTF? Survivorship bias anyone? I follow the S&P because it is much broader and more representative of reality, however, if more covereage came upon the Total exchange traded indices, those would probably be the best to follow. At least i can spell that word.
That Said, mudgeon, I hope Tebow makes Saban very, very sad in Atlanta. My second prediction (in the same post as GM BK last year) was Gators undefeated championship season and Tebow wins his second Heisman. If that comes true, then I’ll still be happy. (although probably unemployed and broke as well).
October 16th, 2009 at 8:02 pm
Sorry for the DP, I was confusing BnT with Mudgeon due to my brain trying to account for two hated villians. . . i think Rocky Top is worse than Roll Tide!
October 17th, 2009 at 11:43 am
In summary, there are signs that risks of a short-term correction or consolidation period could be increasing, albeit within the confines of the primary uptrend. The short-term risks, while on the rise, are still not likely to impact the primary term advance that in all probability has further to run.
“Conflict Resolution Day” occurs every third Thursday of October, and while there may have been some resolutions somewhere, as far as the equity markets were concerned, not much transpired in terms of resolving the near-term disparities that are beginning to appear. As noted in Thursday’s Morning Commentary, “there are elements of the recent rally that don’t quite jibe with a trouble free advance” at least for the near-term. While Thursday’s session saw some upside follow through after Wednesday’s new high in the major market indices, the gains were minor and accompanied by some weakening in market internals. Up Volume was about 46% of the total NYSE Composite Up/Down Volume and about 42% of the NASDAQ total Up/Down Volume. Breadth readings were also showing some deterioration, with Declines outpacing Advances on both the NYSE and NASDAQ. Weakening in momentum was also evident in the % of NASDAQ and NYSE Stocks above 10-Day Moving Averages that dropped from 85.6% to 80.9% and from 92.3 to 89.9% respectively.
The pattern of the advance from the October low being fueled more by a contraction in Supply than an expansion in Demand remains intact. Despite new highs registered by the major market indices in Thursday’s session, Buying Power dropped a point to 132 and Selling Pressure increased by 2 points to 811. To update recent commentary, the rally from the October 2nd low through Thursday now shows a 13 point increase in Buying Power and a 20 point decrease in Selling Pressure. The rise in Buying Power has simply not kept pace with the recent advance and remains below the level registered on the September 22nd market peak at 140. In essence, Demand as measured by Buying Power is not confirming the new market high. This is also evident in our Short Term Indexes on both the NASDAQ and NYSE that remain well below their September peaks. These non-confirmations or “divergences” suggest probabilities could be increasing for a short term correction or consolidation period. Examples of other non-confirmations include our NYSE 30 Day Up + Down Volume and the Percent of Lowry’s Operating Company Only (OCO) issues above 30 Day Moving Averages at levels below those seen at their September peaks. As discussed yesterday, Sentiment readings are also showing indications of possible misplaced confidence of further rally with both Wednesday’s and Thursday’s intraday CBOE Equity Put/Call ratio reaching the mid 40’s. This is the first time since July 2007 that back to back intraday readings this low have been recorded. Overbought readings on other short term indicators may also be increasing the probabilities that at least some near term profit taking could unfold.
On a longer term basis, confirmations are evident in many important indicators and measures that continue to support the primary uptrend. Some of those confirmations include new highs registered in various Advance-Decline Lines and the number of New Highs that reached levels not seen since 2006 in the case of the NASDAQ and 2007 in the case of the NYSE. Our Selling Pressure index has also seen a recent new low confirming the advance. Degradation over several months in these indicators along with a notable increase in Selling Pressure are usually apparent before the development of a major top. However, since these measures are confirming the recent price highs, they continue to support the prospects for additional gains in the primary uptrend.
In summary, there are signs that risks of a short-term correction or consolidation period could be increasing, albeit within the confines of the primary uptrend. The short-term risks, while on the rise, are still not likely to impact the primary term advance that in all probability has further to run.
October 17th, 2009 at 7:26 pm
Paul,
You, and your firm, do good work, as testified to, by: “”Ask one hundred investors whether this is a bull market or a bear market, and you are likely to find their opinions split evenly down the middle.” Identifying Bear Market Bottoms and New Bull Markets … A Study of 90% Days is here to clarify.
This paper was the winner of the prestigous 2002 Charles H. Dow Award
Each year the Market Technicians Association, in alliance with Dow Jones and Company, presents an award for excellence in the field of Technical Analysis. The recipient of that award is Paul Desmond, President of Lowry Research Corporation.
http://www.lowrysreports.com/research_studies.cfm
http://lowryresearch.com/custom_reports.cfm
You can listen to the Bloomberg podcast at the end of this post.
If you’re new to Lowry’s, many of the terms below may be confusing. For example, Pim refers to “Lowry stocks” which is a misnomer. What he means is OCO (operating company only) breadth, which is Lowry’s response to the pollution on the NYSE. This measure strips out ADRs, CEFs, REITs, bonds, ETFs, etc. and only shows market breadth for operating companies. For more background like that, as well as an explanation of Lowry’s proprietary indicators, take a look at my post late last year outlining Lowry Research’s position on the then market conditions.
http://www.tradersnarrative.com/index.php?tag=oco
sometimes it’s helpful leave a trail of breeadcrumbs..