I'm sure we'll be seeing headlines like:
Stocks surged on news of the 16th qtr of economic contraction and disastrous employment figures.
It's off the agenda at the moment.Yeah its a worry, what the yen carry trade pointing to Wayne?
It's off the agenda at the moment.
Sellers are getting swamped buy buyers in the futures, watch it go green.Dow is down Gold and gold stocks up at the moment I have a problem.
They both will fisnish in the same direction?
bespoke
(off topic)Edwood3 said:
Barry Ritholtz said:Which is Performing Better, the Dow or the S&P500 ?
in Data Analysis | Index/ETFs | Investing | Markets
The short answer is, depends on how you calculate it.
The results of looking at these two indices from various angles may surprise you.
The Dow is at an all time high, the S&P500 a few percent below. But it turns out that, as a whole the SPX is doing much better than the Dow.
The New York Times' Floyd Norris gives us the details:
"The Dow is normally calculated as a price-weighted index, meaning that stocks with the highest price for a share get the heaviest weighting. That is largely a historical accident, as it was the easiest way to do it in the 19th century, when the best calculator available was a person with a pencil.
The most common method of calculating indexes is by market capitalization, in which the companies with the largest market value count for the most. The chart [below] shows how the Dow would look if it were calculated in that manner, instead of the other.
While the Dow is up 18 percent from March 24, 2000, when the S.& P. peaked, it would have been down 8 percent had market capitalizations been used in the computation. That reflects the fact that some of the Dow stocks that did the worst, including General Electric, Microsoft, Intel and Pfizer, are large capitalization stocks that had relatively low share prices. That meant they had little impact on the Dow as normally calculated, but a large effect on the Dow as computed using capitalization figures."
What about equal weight computation? Hasn't that ETF (RSP) out performed the standard S&P500? Glad you asked -- yes, yes it has:
"The third method often used in index calculations is one of equal weighting, which assumes that one puts the same dollar value into each stock in the index.
The chart [below] shows that the S.& P. 500, calculated by market capitalization, is still 2 percent below where it was on March 24, 2000. But that reflects poor performances by some of the same very large companies that starred before 2000 and have not done as well since. Calculated by equal-weighting, the S.& P. 500 is 82 percent higher than it was in 2000."
The following charts show Dow and S&P500 performance since March 24 2000 (the day the S&P500 peaked):
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click or much larger graphic
Graphic courtesy of NYTimes;
Sources: S&P, Bloomberg
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It would be interesting to see a price-weighted version of the SPX, or a an equal-weighted version of the Dow.
Norris adds that by the market capitalization version makes clear that "the Dow has underperformed, even if it is the Dow that is the index setting records these days."
Of course, all of these measures are domestic. Measured in euros, the price-weighted Dow is 15% lower than its 2000 peak . . .
If you look at the broader indices (SP500, Naz, R2K), none are at new highs, so yes a bit of an illusion.interesting stuff Wayne - so this record setting is just an illusion...
Short term I think he is right. Medium term... Mr Fly may get "Bear Grabbed"Fly On Wall Street said:I know many of you "bear grabbers" out there profess the demise of the U.S. consumer, with all of his credit card debt and utter insanity. Clearly, you underestimate the resilience or stupidity of the U.S. consumer.
See, if our bank accounts run dry and credit cards get canceled, we will steal hub caps or sell off valuable family heirlooms, in order to buy the new iPHONE or flat panel T.V.
There is no stopping us. Ever!
Trying to get to the pivot, but textbook bounce off support for daytraders.Dip buyers in. P$#@weak effort from the bears TBH.
Bovine mode on.
Part of what I mentioned in where the price of gold is going.However, yes however there is still strength in the DOW & NYSE it still wants to go higher although it has weakened slightly a number of indicators are still quite strongly positive and may require what I have mention above.
Tonight and tomorrow hold the key as to whether this is the start of a severve correction or not or a breather before the Dow advances and it has to advance with strength because the ‘Nasdaq needs help’
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