The technicians may tell you ignore Dow 10,000, but if we can’t hold this level, the aftermath may be much worse than you think!
That may sound dramatic and the chartists will probably scoff but it’s likely true. That’s because of the psychological impact carried by Dow 10,000.
Oh, we know psychology doesn’t go far on Wall Street but it packs a powerful punch on Main Street. “It's a huge deal because this sends a message to the 98 percent of the people that don't watch the market every day," explains Art Hogan of Jefferies.
And that message is… things are getting better.
In fact, that message could be a self fulfilling prophecy. At 10,000 people may start to spend again. Not because of gains they’ve realized in the market, but because they feel more confident they’re not going to lose their job.
It’s also a level at which communities resume projects they halted because of the recession – we’re talking things like new ball fields or music rooms.
It’s a level at which people resume charitable giving, or finally go the dentist or a hundred other things.
It could prove compelling to a "whole portion of the population” adds Hogan. Don’t forget average Americans find investing complex and confusing, but Dow 10,000 is something most people can grab onto. It’s easy and friendly.
And as a result it’s a level that could bring massive amounts of money back into the market.
Steve Grasso of Stuart Frankel thinks Main Street has probably missed the rally so far. “I expect to see individual investors start dipping a toe, now. I expect the rally to continue.”
And that could generate a virtuous spiral higher and higher. As more people return to the market, stocks go higher, companies create jobs and… well you get the picture.
Like we said above the technicians will scoff but Dow 10,000 could make or break us.
What do you think? We want to know!
At least one technician didn't scoff. Greg Troccoli of Opalesque took a hard look at the patterns and was surprised to see a meaningful trend emerge.
What did he discover? Watch the video and see for yourself!