Dow 16,000 is so close. But is it too far?
Less than 400 points separate the Dow Jones Industrial Average from the 16,000 mark. That’s just a 2.5% move on the upside.
However, could that be too much to ask of the index right now?
Though most of the financial industry follows the cap-weighted S&P 500 index (containing 500 of the largest companies), popular media sees the Dow as an indicator of the market. However, the very structure of the Dow index is a major factor in how it moves.
(Related: CNBC’s US Markets coverage)
“The Dow is a peculiar index,” says CNBC contributor Steve Cortes, founder of Veracruz TJM. “With only 30 stocks, individual names or a small group of names can really move this index up or down.”
“And, [the Dow is] price-weighted,” says Talking Numbers host Brian Sullivan, “so one big drop dollar-wise from a big name sends it down. It may mask the real fundamentals of the index”
(Related: Stocks turn higher ahead of close)
Does Cortes believe the Dow will hit 16,000 any time soon? And what about the technicals?
Analyzing the Dow’s charts is Abigail Doolittle, Technical Strategist at The Seaport Group. She says the Dow has broken out of its trading range. Because of that, she has a strong opinion about its next price target.
To see Cortes and Doolittle on where the Dow is headed next, watch the video above.