The Dow is the worst index ever

All those freaking out about the Dow going under 11000 are fools.

The Dow is a price weighted index making its weightings arbitrary. Stocks with the highest prices have the most influence on the stock regardless of capital size. A stock trading at $100 has 10x the influence than a stock trading at $10, even if the $100 stock has 1/10 the market cap. If BRK.A was included in the index, it would destroy the system. It just doesn't make sense to use it.

The stocks are arbitrarily chosen too, with just 30 selected by a committee. While they are generally a fair representation of the economy, you are just looking at a small sliver of the actual companies trading in the markets. You are looking at a small number of companies whose weightings defy the laws of logic.

The S&P 500 is the best widely known index on the US markets, but most people focus on the Dow and then the Nasdaq (which is good except for it accounts for half the markets). In a rational world, CNBC and all the financial pundits would focus their time on the S&P 500.

The only reason the Dow is popular is because everyone else is using it. It is like every other conventional wisdom on the Street, which people just follow because others are doing it. If you think following the herd (all those fools who actually care about the Dow) then buy yourself an index fund. You aren't gonna make excess returns in the market.

The worst is when I see technical analysis done on the Dow, which is like using a pseudoscience to analyze a pseudoscience IMHO. Instead look at market capital weighted indexes like the S&P, Nasdaq, and NYSE, whose movements focus reflects changes of the capital in the markets, instead of random prices. Maybe you can find some more meaningful patterns in there.