Nasdaq 5000 or Bust
by James B. Tharin, CFA
On March 10, 2000, the Nasdaq Composite Index set an all-time record high at 5048.60. What followed was an unbelievable two year and seven month drop of 78% known today as the tech wreck. Almost fifteen years later after that Y2K example of Irrational Exuberance and about twelve years and seven months after bottoming at 1108.49 on October 10th, 2002, the index appears to be making a run at its old record.
Old highs out of an index can often be areas of stiff resistance. However, markets that do manage to convincingly break out to new highs have historically gone on to post significant gains. This milestone is one to watch. As of this writing the Nasdaq Composite index stands at 4879 or just about 3 ½% below its peak. Will it prove to be the end … or just the beginning?