NASDAQ finally closes above 2,500

I almost didn't even notice, but on Friday NASDAQ quietly managed to close above 2,500 for the first time in almost six years. The last time NASDAQ closed above 2,500 was on Thursday, February 15, 2001 when it closed at 2,552.91. The last intraday high above 2,500 was 2,593.09 on that same day.

Incidentally, the first time NASDAQ closed above 2,500 was on Friday, January 29, 1999 when it closed at 2,505.89, with an intraday high of 2,506.68 on that same day. NASDAQ was above 2,500 for a period of not much more than two years.

I don't expect NASDAQ to climb above its former peak over 5,000 any time soon, but the 3,000 level is certainly within striking distance as the economy gradually picks up steam. That would be a 20% gain, which is quite doable in one to two years. NASDAQ was only above 3,000 between Wednesday, November 3, 1999 when it closed at 3,028.51 and Monday, December 11, 2000 when it closed at 3,015.10. That's a period of a little over one year. The last time NASDAQ was over 3,000 was the intraday peak of 3,001.72 on Wednesday, December 13, 2000.

The way I like to think about this is to forget about the boom (and crash) and simply go back to that first time we hit 2,500 in November 1999 and think of that as the starting point and ask what needs to happen in the economy, business, and technology to advance from there. The goal is not to try to repeat the boom (and crash), but to have a sensible stock market going forward.

For NASDAQ in 2007, I am thinking that a 5% to 15% gain is within the realm of reason. That translates into the 2,625 to 2,875 range. Nominally, a gain of 10% is fairly reasonable, which would be the 2,750 level.

-- Jack Krupansky