IF DJIA uses an 8X multiplier to "normalize" the curve aren't we really sitting at a DJIA of 1000?
Do "www.stockcharts.com" go to "historical charts" and open "DJIA 1900 to present"
Note a HUGE head and shoulders developed in post war era where there is a 20yr
shoulder at 1000. Could it be we've already retreated to that level and are due a bull run?
Answers
2183 points
ChaosNantuko answered 7 months ago …
The normalization is because when they change the stocks in the dow, the dow shouldn't move up or down hundreds of points based on stock price...
(eg if they take out a $30 stock, and add a $700 stock, the dow should still be at the same levels, just now it changes based on the movement of the $700 stock instead of the $30 one).
Because of that, the 8X multiplier represents the "correct" price, and removing the multiplier would add a margin of error that has no logical reason for being there.
