No Big Deal

Commentary: Dow 11K Has No Special Technical Significance

The most bullish thing a market can do, according to the age-old saying, is go up.

So the stock market's strength today is bullish.

But the bull market will earn no extra credit if the Dow Jones Industrial Average is able to also close above 11,000.

That's because that level enjoys no particular technical significance. The Dow is several hundred points above its 50-day moving average, for example, and nearly a thousand points above its 200-day moving average. Both of these are widely followed technical hurdles.

The same goes for the Dow Theory, perhaps the longest-lived market timing system in widespread use today. It nearly a month ago confirmed that we were in a bull market, when the Dow closed above its mid-January high.

This isn't to say that no technical analyst somewhere, somehow places technical significance on Dow 11,000. But none of the nearly 200 investment advisors monitored by the Hulbert Financial Digest has announced that he will become more bullish upon a Dow close above the 11,000 level -- or that he will become more bearish if the Dow fails to do so in coming sessions.

To be sure, Dow 11,000 does have psychological significance. And there will be lots of headlines when the Dow does surpass that level -- and it's possible that this extra media attention will in turn translate into a short-term burst of additional buying from retail investors.

But, other than that, it would appear that all this attention on Dow 11,000 is a lot of sound and fury signifying nothing.