Friday, April 24, 2015

After 15 years, NASDAQ tops out.

The Wall Street Journal reported yesterday that the NASDAQ, after rising 21 points, ended at 5056, exceeding its all-time closing high of 5049 reached on March 10, 2000. While the Dow Industrials and the S&P 500 have notched dozens of new records in recent years, it has taken the Nasdaq over 15 years to recover from the dot-com bust (see graph).

The Dow closed at 18,059, or -230 off its March 2 peak. The S&P 500 ended at 2,113, just -4 below its all-time high, also on March 2. The March 2 combined total for the three indexes was 25,414, as against yesterday’s 25,228. On this red letter day for the NASDAQ, with the three indexes all at or near their all-time highs, the New Fox Index -- which captures movement into stock market “outer space” first achieved in May 2013, the escape velocity attained by soaring past old-time market theoretical limits of a Dow of 15,000, an S&P 500 of 1,600, and a NASDAQ of 3,500, for a total of 20,100 -- hit +5,128 (see chart).

The markets' next big target, assuming the boom continues, will be a Dow of 20,000.  Remember, though, as financial guru Bernard Baruch (1870-1965)  used to say, "The main purpose of the stock market is to make fools of as many men as possible."

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