Silicon Investor (SI) -- The First Internet Community

STOCKTALK

We've detected that you're using an ad content blocking browser plug-in or feature. Ads provide a critical source of revenue to the continued operation of Silicon Investor. We ask that you disable ad blocking while on Silicon Investor in the best interests of our community. If you are not using an ad blocker but are still receiving this message, make sure your browser's tracking protection is set to the 'standard' level.

Strategies & Market Trends : MDA - Market Direction Analysis -- Ignore unavailable to you. Want to Upgrade?

To: Michael Watkins who wrote (41575)	2/27/2000 5:58:00 PM
From: Michael Watkins	Read Replies (1) \| Respond to of 99985

More facts and fun, the Nasdaq has been a percentage basis leader almost since inception, as compared to the INDU and SPX. I started a percentage change chart at the begining of COMPX data, and except for the period between 71 and late 77, the Nasdaq has returned more on a percentage basis, not ever again equalled by the other major indicies with the exception of a one month tick below the INDU in Oct 1990. During the 87 correction, and measuring their %change from the start of the COMPX: Nasdaq 330% down to 185% net -146% loss peak to bottom INDU 213% down to 104% net -109% SPX 249% down to 143% net -106% So the nasdaq falls harder. 1998 Correction measured with July, Sept, Oct data, again percentage change basis since start of COMPX: Nasdaq 1813% down to 1314% net -499% change INDU 971% down to 756% net -215% change SPX 1130% down to 890% net -240% change And this correction? Lets assume is stops now for the SPX and INDU: Nasdaq 3760% UP TO 4300% net +540% positive change INDU 1216% down to 1019% net -197% change SPX 1423% down to 1274 net -149% change intelligentspeculator.com Other than this massive divergence which is unprecedented, its worth noting that the percentage change chart of the INDU has dropped through what we could call support. As I look back in history these occurances during a correction are infrequent. Sometimes they have presaged excellent buying opportunities, other times (notably the 70's) they have defined the start of much larger pullbacks. In 73 after a break by the INDU and SPX, and a brief rally back, they broke again and did not reclaim their old highs until mid 1980 for the SPX and the end of 82 for the INDU. Interestingly, the Nasdaq first reclaimed, and held, its percentage change high in mind 1979. So, the Nasdaq falls farther and rebounds faster. Nothing new to most of us. What we don't know is what history will write about this massive and unprecedented divergence... Uncharted territory here.