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Strategies & Market Trends : Stock Attack -- A Complete Analysis
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To: EightyEight who wrote (37037)12/2/2000 10:46:56 AM
From: donald sew  Read Replies (4) of 42787
 
Something that LEE and I have looked at in the past, was the NAZ/DOW ratio.

sandspring.com

After seeing that article, I recalled that the ratio between the DOW:NAZ was around 5:1 for a long time. Easy numbers to remember are the OCT 1998 lows when the DOW was around 7400 and the NAZ around 1400 producing a ratio of about 5.3-to-1. When the NAS got into the 5000 region, that ratio got as low as in the 2's. Would a sign of normality and a possible target be for the ratio to get back to the 5:1 region, which may also be the end of the decline in the NAZ.

Another way to look at it is if the DOW drops no lower than 10,000 NAZ would return back to the historical range of 5:1 if the NAZ drops to 2000. Based on this assumption here are some of the DOW-NAZ ratios based on 5:1.
DOW 10000 - NAZ 2000
DOW 9500 - NAZ 1900
DOW 9000 - NAZ 1800
DOW 8500 - NAZ 1700
DOW 8000 - NAZ 1600
DOW 7500 - NAZ 1500 - DOW around 7400 in OCT 1998
DOW 7000 - NAZ 1400 - NAZ around 1400 in OCT 1998, and approx major bull trendline for NAZ.

Just a wild thought. Interesting if the DOW drops to 10000, the 5:1 ratio would be achieved with the NAZ at 2000. The low 2000 region has been a target by quite a few.

seeya
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