Either way, you cannot discount the idea that a round number like Dow 17,000 will cause investors to stand up and take notice. If for no other reason, it is a big round number, another milestone in a market that remains suspect.
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Here's what happens: The media will highlight it, put in in the context that the market has tripled since the depths of the crisis. They will present it in such a way that it will cause investors to re-think their investments or their investment philosophy — it will remind the public — especially the ones that have chosen to "sit it out" -- that the market, in fact, keeps going up. Have they missed it? Have they been too cautious?
The truth is, it's only a number. It should be meaningless, but, in fact, it may not be. Traders and investors try to make sense of the markets. They measure it by using numbers and big round ones usually cause a bit of excitement, which can then lead to increased buying by the retail investor.
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These milestones are mostly psychological - significant only because they can cause real emotional reactions. My guess is that Dow 20,000 will be the real emotional ringer; Dow 17,000, not so much. But either way, emotional reactions tend to become infectious, feeding on itself where buying begets more buying, causing a herd-like reaction. The question then becomes: Is the herd-like reaction the right reaction?