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Are there Psychological Barriers in the Dow-Jones Index?


  • Eduardo Ley
  • Hal R. Varian


The popular press attaches particular significance to certain numerical values of the Dow-Jones index. These magic numbers are referred to as `resistance levels' or `psychological barriers.' We examine 38 years of closing values of this index to see if it is of any help in predicting future stock market returns.

Suggested Citation

  • Eduardo Ley & Hal R. Varian, 1994. "Are there Psychological Barriers in the Dow-Jones Index?," Finance 9401002, EconWPA, revised 27 Oct 2001.
  • Handle: RePEc:wpa:wuwpfi:9401002
    Note: PDF, paper published in Applied Financial Economics, 1994.

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    Cited by:

    1. Chris Doucouliagos, 2005. "Price exhaustion and number preference: time and price confluence in Australian stock prices," The European Journal of Finance, Taylor & Francis Journals, vol. 11(3), pages 207-221.

    More about this item


    Dow-Jones index; psychological barriers; resistance levels; market efficiency;

    JEL classification:

    • G00 - Financial Economics - - General - - - General
    • G1 - Financial Economics - - General Financial Markets
    • C1 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General


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