The Wilshire is definitely too broad and as such will always lag...BUT the S&P has enough breadth and enough representative turnover to be the fulcrum.
NDX is down over 30% from its high. S&P...broader yet very much in tune with leadership is down approximately 10%. Watch the fulcrum...not the ends of the see-saw. The fulcrum is a better gauge of the tide...the extremities follow the tide in general but also throw the waves in your face.
Good advice Doug...
I usually watch the S&P, Nasdaq, and NDX... While I agree that the S&P is the fulcrum, the NDX is the heart of the market... In the next few years, companies like YHOO, ORCL, MSFT, DELL, INTC, SUNW, etc., will be at the center of the ever growing technology share of the U.S. economy... We simply cannot grow if they are not growing... And, since they represent a large portion of the NDX trading volume, following the NDX is like following the direction of the economy...
The exponential growth of the internet with the aid of these dominant NDX companies has made this index my major focus for the foreseeable future... A break above the 20 day MA at 3380 brings in the interim period players for a test of the 3525 to 3550 area:
bigcharts.com
Jim |
