Donald: I have an explanation to the new highs being so slow in reaching 100. I don't know how valid this is, but here it is:
During the July peaks, the markets rallied without some of the high tech and semiconductor groups. As I recall, SOX was in a decline when everything else rallied. I don't monitor the indices of all the different sectors, but may be you know if there were other divergences like this one at this same period of time. The SOX was 275 at it's highs in July, and today it is 311. That is 13% above is July level. And yet it is still 25% off of its all time high.
I know that the Dow does not reflect this, and semis are not well represented in it. True, the big caps have rallied more that others, but that is business as usual in a rebound. As for the rest of the market, I believe that there was enough of a sector rotation to cause the new highs to remain under 100. I don't know if this is good or bad for the market. All this tells me is that the big caps are over valued again, but the rest fo the market may still in bargain territory.
This is just my opinion. I may be way off base.
Regards,
Jaime |
