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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Spots who wrote (12855)	1/9/1998 11:07:00 AM
From: James F. Hopkins	Read Replies (1) \| Respond to of 94695

Spots; For a fact I know your wrong on the Dow Index, It is not weighted via price or market cap, and thats a fact. Each issue can alter the index the same amount for each dollar it changes in price. I could look up the diviser they use, but don't have time to get back into that, anyway it applies to each stock the same, regarless of price or market cap. A $1 move in GE is no different to the index than a $1 move in UK. Had I not discovered this I would not have gone to the troble of creating my own, which are weighted..both ways ! And they most often differ a lot from what the Dow shows. Jim

To: Spots who wrote (12855)	1/9/1998 11:24:00 AM
From: James F. Hopkins	Read Replies (1) \| Respond to of 94695

Spots; RE >they contain equal shares of each stock so the higher priced stocks account for more of the index value percentagewise than the lower priced ones.<< -------------------- I see here what your saying, and that is true..Just keep in mind that because GE say has more " VALUE" in the index than a lower priced one" IT does not "move the index" any more with a dollar swing in its price than any other one. In essence how much dollor value the stock has , is not relitive to what the index does, because of the "equal" amount of shares. Worse yet, Stocks with fewer shares outstanding.. also can swing the index just as much as thoes with 100 times more shares outstanding, this tosses a real cruve at you as to what the market is doing. ( like the most widely held stocks in the index held captive to the thinly held issues, or say the index is held captive to that and can be very missleading about what the Bigger picture, and the major market is doing. ------------------------- It causes me heartburn to see how CNBC and so many news people focas peoples attention on the DJI and teach them to think it fairly represents the over all market at any given time, very few things I can think of are futher from the truth. Jim Jim