Update: The NASDAQ closed at 5,008.10, up 0.9 percent on the day. That the index closed over the 5,000 mark is even more interesting that it managed to break the level during intraday trading.
The NASDAQ Composite index, a barometer of sorts of the technology industry, traded north of the 5,000 mark today. It was the first time the Composite had traded at that level since the late 90s technology bubble.
The 5,000 mark could nearly be called bad luck. After the NASDAQ crested the level in spring of 2000, the index fell quickly and massively. By the end of the year 2000, the NASDAQ had fallen by more than half. It would halve again before the end, trading in the 1,100s before recovering.
I present you two charts of the same substance, viewed from very different temporal perspectives. Here is the current three-day chart of the NASDAQ, with a certain section highlighted:
And, here is the NASDAQ, zoomed out a bit further. The same 5,000 threshold has been noted in the following, albeit twice. Though, only one circle is new, of course:
I am not saying that the two points are directly comparable, and that the artificial threshold of This Particular Round Number is something that matters. But that we are again kissing 5,000 — the stock market equivalent, in this case, of batting .500 — does tell us something: We have had a hell of a run.
If you look at the second chart, you’ll note a very long bull cycle, pushing up the value of tech stocks since 2009. This is hardly surprising in many ways, given the economic recovery that has been recorded since the last recession, but it almost looks too smoothly up and to the right, doesn’t it?
In a practical sense, what does 5,000 mean? It underscores the point that tech isn’t slowing down. Yet, at least. With the NASDAQ at 5,000, the IPO window is open, and venture capital, which is essentially the public Composite on steroids, will remain as hyped as it has been. The higher up things go before a correction, of course, the stiffer the correction.
For today, however, it’s good times all the way to the horizon.