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Strategies & Market Trends : Technical analysis for shorts & longs
SPY 683.47+0.6%Nov 28 4:00 PM EST
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To: Johnny Canuck who wrote (34938)10/27/2001 7:47:29 PM
From: Johnny Canuck  Read Replies (1) of 68432
 
Rre-balancing of QQQ will reduce voltatility:

The rebalancing of the underlying Nasdaq 100 index in December is bound to have a significant impact on the markets. Last year, stock added to the Nasdaq 100 outperformed the underlying index by 10% in the three days before the reconstitution date, and underperformed by 11% in the subsequent 10 days, according to a recent report by Bear Stearns strategist Wing Chow.

The timeline of the rebalancing works this way: on Wednesday, Nasdaq will peg the prices of replacements and deletions. Nasdaq won't announce final changes until the morning of December 17, and those changes are effective after the close of trading on the third Friday in December, or the December 21 market close.

Lehman Brothers recently projected the Nasdaq 100 index's most significant industry-weighting increase would be in drugs, up to 15.8% from 12.9%, making it potentially the third-largest industry in the index. Computer software, estimated at 23.1%, has the biggest weight, followed by semiconductors, which could show the biggest decline to an estimated 16.3% from 18.5%, says Lehman managing director of equity derivatives Murali Ramaswami.http://interactive.wsj.com/articles/SB1004145106199012240.htm
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