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To: Real Man who wrote (339795)8/3/2007 9:03:03 PM
From: Giordano Bruno  Respond to of 436258
 
July losses
The DOW -.53%
S&P 500 -3.2%
Russell 2000 -7.2%

...I'm suggesting here that the new preference for the blue chips in the Dow is a sign that investors are getting more nervous about the stock market and are shifting to the "safest" stocks.

...Here's the point. The Dow/S&P ratio bottomed in 2000 as the market was peaking. The ratio peaked in 2002 as the market was bottoming. The ratio is now rising. In the past, a rising Dow/S&P 500 ratio has coincided with a weaker market. That's why recent preference for blue chips isn't a good sign.

-John Murphy

stockcharts.com

(smart guy)