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Dow 10,000 - What's the Significance? 
DJIAThursday, October 15, 2009
By Gibbons Burke
The Dow has seen 13 days in the past where the high has crossed above the 10,000 level (omitting repeat occurrences within two weeks) with a history stretching back to March, 1999. The last time it did so was October 19, 2004. In that case, which we wrote about here2, the Dow gained 6.6% by t+19.
The Dow looks like it is poised to pounce on that psychologically prominent round number.
Q: What can history tell us about how the Dow has fared in the days and weeks following this event in the past?
A: According to the 13 previous occurrences of this event, EventEdge indicates that DJIA.a has shown a strong bullish edge that peaks 12 trading days after the event. Thus, the projected date for the peak of the bullish edge relative to the current event date (Tuesday, 19 October 2004) is Thursday, 4 November 2004. DJIA.a rallies in 77% of the cases (10 of 13) by an average of 4.8% relative to the close on the event date. The average of the 3 declines is -1.3%. The overall return of the 13 cases is 3.4%, which, based on the close of DJIA.a on the event date (9,897.62), provides a target price of 10,234.14.
This trading idea was featured in Thursday's Denver Post3. Click here43 to read the article online.
Gibbons Burke5 is editor of MarketHistory.com.
Related Ideas:
- Dow - Up Periscope!6 - October 20, 2004
- Dow and 10,0007 - August 18, 2004
- Dow at 10,000 - Once More Into the Breach8 - December 9, 2003
 |
Let variable values:
@ = DJIA_ACT
theEvent = IF
High of DJIA_ACT crosses above 10000
THEN 1
ENDIF
Date Day t+12 t+13 t+14 t+19 t+20
03/16/1999 Tue -1.0 -1.0 0.8 4.1 4.7
04/02/1999 Fri 6.3 7.6 9.1 10.6 9.7
03/09/2000 Thu 10.1 9.2 10.1 10.2 11.0
03/20/2001 Tue 2.0 0.7 1.3 4.5 5.1
04/10/2001 Tue 5.8 7.0 6.3 8.2 7.7
12/05/2001 Wed -0.8 -0.8 -0.3 0.6 1.4
02/14/2002 Thu 4.3 5.7 5.2 5.2 6.1
04/30/2002 Tue 3.4 4.1 2.8 1.6 0.4
05/31/2002 Fri -2.2 -3.7 -5.0 -6.6 -6.9
12/09/2003 Tue 4.0 5.3 5.1 6.1 6.7
05/19/2004 Wed 4.6 5.0 4.3 4.4 4.8
08/17/2004 Tue 3.2 2.9 3.7 3.5 2.6
10/19/2004 Tue 4.2 4.9 5.0 6.6 6.0
Avg 3.4 3.6 3.7 4.5 4.6
AvgPos 4.8 5.3 4.9 5.5 5.5
AvgNeg -1.3 -1.8 -2.6 -6.6 -6.9
PctPos 76.9 76.9 84.6 92.3 92.3
PctNeg 23.1 23.1 15.4 7.7 7.7
Maximum 10.1 9.2 10.1 10.6 11.0
Minimum -2.2 -3.7 -5.0 -6.6 -6.9
StdDev 3.3 3.8 4.0 4.5 4.6
ZStat 1.0 1.0 0.9 1.0 1.0
Variance 11.1 14.4 15.7 20.0 20.8
13 Occurrences |
Comments:
Web Address of this trading idea:
Links:
2 7350.html
3 http://www.denverpost.com/
4 http://www.denverpost.com/frontpage/ci_13564286
5 http://www.markethistory.com/staff/detail.html?s=gibbons
6 http://www.markethistory.com/content/content.html/7350.html
7 http://www.markethistory.com/content/content.html/7156.html
8 http://www.markethistory.com/content/content.html/6308.html