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Strategies & Market Trends : Ask DrBob -- Ignore unavailable to you. Want to Upgrade?

To: stan_hughes who wrote (58689)	5/5/2002 10:19:47 AM
From: Louis V. Lambrecht	Read Replies (1) \| Respond to of 100058

hi! stan - re:apples to apples. I checked the Russel indexes. As they are constructed, Russel 3000 (RUA) = Russel 1000 (RUI) + Russel 2000 (RUT) Here an image: first 3 charts divide the Down Jones industrial by each of the Russel indexes. Last chart divides the Russel 1000 by the Russel 2000. Indu/R1000 rises = R1000 tanks faster than the Dow. Indu/R2000 lessens = R2000 outperforms the Dow Indu/R3000 rises = measure of the Dow versus a broad market index tells only that there is more market cap in the 1000 first companies than in the rest of the universe. R1000/R2000 = what we expected : mini- and micro caps outperform better in a bear market. Now, the question is: what does outperforming means? Lose less or are they really up? <g> Note the Q4 1999 sharp through of the Russel2000 vs. Dow: micro caps were late in the bubble but corrected in Mar 2000. Does the rule means last up/first down ? These micro caps seem to perform in a channel vs. Dow ever since. Or are these merely more stable in price. Suggesting that the Russel 2000 could be a more reliable comparative base? lvlamb.itgo.com

To: stan_hughes who wrote (58689)	5/5/2002 11:31:26 AM
From: CookiePuss	Read Replies (2) \| Respond to of 100058

hey stan, one theory i have read that could explain the more extreme bearish readings in the bpndx is the biotech factor. the ndx was readjusted last fall and more biotech was added to the index. given the whipping biotech has been taking lately, this could explain the divergence between ndx and compq sentiment. i was just looking at the ndx sentiment lows that were hit right before significant bounces occured in February-March 2002, September-October 2001, March-April 2001 and the bpndx gave false signals of a market bottom in each time period. bpcompq gave cleaner signals of a bottom imo.