The Dow S&P Ratio
Since April 16th the dow jones industrial stocks have been outperforming the S&P 500. You'll notice in the Dow/S&P ratio chart above that the trendline has been broken and it appears there is also a double top formation.
This could mean we might see a rotation out of dow stocks and into S&P stocks or maybe this is a sign of weakness for the market if the strongest index (dow) is no longer leading us up. I'll leave it up to you to decide what this might mean for the market but I just wanted to bring this chart to your attention.
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5 comments:
Waiting for some money to move into the Nasdaq. Then, we will party like it's 1999 all over again.
Same story with the Russell 2000, right? I think this combined with the IBD100 leading the other indices last week might show a rotation out of the big caps and into the smaller, more aggressive stocks.
Kevin, next week is the 2nd week of the month. Do you still see the trend for the dow continuing i.e. closing higher next week?
BTW: Great post. Astute observations! Glad you are back.
As of now yes.....but if the dow closes below it's 50 day moving average on Friday I will not buy next week.
Kevin,
How about buy ES eMini and sell Dow ? What is ratio ?
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