lisa,
market staying up that means market have a chance to hit new high because new money would not be scared off not to come in, it is a psychology factor, just mho. as opposite to market might collapse because it cannot stay up. staying up at least maintain the level of current momemtum, dont you think so ?
they need to rotate among sectors so the hot sectors, i.e. drug, financials have time to take a breather and other sectors play catch up. That day CCI ran up 20%, at least 2 noted fund managers said on CNBC they sold either a portion or all of their CCI holding - think about it, if they have a good profit in it, may be 75-100% on CCI, at this level, wouldn't they lock it when the upside from here is limited while downside is quite big ? wouldn't they put their money into some relative lower valuation stocks which would have a bigger upside in the next quarter ?
a rough calc is one point move in a dow component accounts for 4 pt move in Dow that is what I heard on CNBC, so it doesn't take too much to move DOW to new high, after so many dow stocks have split to under 100 level.
cyclicals have a much larger porportion in DOW than in S&P - remember, Dow is called DJ Industrial Average - "Industrial" from the old days, are cyclicals.
On the other hand, drugs have quite a large weight, so as Banks, in S&P porportionally as versus in DOW. I believe MRK, PFE are among the top 10 or 15 S&P.
you want to look at the exact weighting of each industry in S&P - go ask Kevin - he should be able to give you the weighting, or at least the top 50 S&P - the biggies which matter the most.
market is not weak at all - if you take the sector rotation into account that is why I told don dont be fooled by S&P looks weaker than DOW today.
this is just my intuition thinking, nothing related to technicals etc. |
