The Irrelevance Of Dow 20,000

JC Parets
December 13, 2016

Most of us are here to try and make money in the market. Some others are just here to make noise and create content they think will help them drive traffic to sell ads. The importance of the Dow Jones Industrial Average hitting 20,000 is one of the biggest lies of the year. I'm lucky to be good friends with some of the smartest traders and analysts in the world. We email each other all the time privately to share ideas and discuss some of the things we're seeing out there. If there is something worth watching, I'm likely to get an email about it, or at least be included in an email discussion on the topic. So far, zero mention of this arbitrary 20,000 level, but double digit emails from media asking me what I think. See the difference?

Last year, the big lie from the media was the importance of the Nasdaq Composite hitting 5000. There were parties being thrown on the tv, emails going out to massive lists trying to drive traffic based on nothing: the importance of Nasdaq 5000. Here is how that Nasdaq hitting 5000 last year worked out. Based on what I see, the market could not have cared less about your Nasdaq 5000:

COMPX

And I was vocal about it at the time too. It was clear to me then how irrelevant the Nasdaq hitting the arbitrary 5000 level was, and was more focused instead on what the NYSE Composite was doing. As it failed to breakout, down went the NYSE Composite and the Nasdaq straight down with it:

jc twitter

At this point, here we are approaching 20,000 for the Dow Jones Industrial Average. Once again, I see little evidence that 20,000 means anything to anyone relevant. The spectators love it because they can create content. But to those who actually matter, market participants, there's nothing there. To me, the 20,200 level is the one we actually want to watch. This level represents the 161.8% extension of the 2015-2016 correction:

Dow Jones Industrial Average
So ask yourself: Who is writing/saying what you're reading/listening to? What are their objectives? Is their job to make noise and try to drive traffic? Or are they trying to make money in the market? There is an obvious conflict of interest that we see exist daily. This Dow 20,000 nonsense is just another good example. The good news is that the more they push the importance of this arbitrary number, the more clear they are making it to you and me that their best interests highly conflict with your best interest as a market participant trying to make a profit. So we know who is who.....

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Tags: $DJIA $QQQ $COMPX $DIA $YM_F $NQ_F

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