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Strategies & Market Trends : The Millennium Crash -- Ignore unavailable to you. Want to Upgrade?

To: bobby beara who wrote (2893)	7/12/1998 9:48:00 AM
From: Arik T.G.	Read Replies (1) \| Respond to of 5676

Hi BB, >> The Nasdaq rally is incredibly narrow, the a/d line on the nasdaq is a screaming divergence. It's worse then that. There are a dozen stocks that keep the indices up. The rest of the market is only marginally higher then a year ago. Remember August 6th, 1997? Of course you do, that peak held for half a year. The OEX peaked at 469.29 It is now 100 points higher. The Daring Dozen account for 70% of that rise, while comprising only 41% of the index weight after their rise. To be included on this very short list a stock has to answer the following: 1. A big cap, included in the major indices 2. Pulling the market to new highs, meaning reaching new highs before or at the same time as the major indices. They are: GE, MSFT, KO, MRK, WMT, PG, BMY, AIG, CSCO, F, AXP, MCD. A couple of months ago there were more in this group of extraordinarily performing big caps. JNJ is the last one I deleted from the list, since it retraced over 6% off it's high on 6/24, while the oex reached new highs since. At the recent peak of the OEX last Wednesday, 7/8, the score was: GE- 93 5/16 (new all time high) 34.6% gain from 8/6/97 MSFT- 109 7/8 (new all time high) 53.2% gain from 8/6/97 KO- 87 3/16 (new all time high) 28% gain MRK- 133 5/8 (-0.9% from the all time high reached two days earlier), 31% gain since Aug. WMT- 62 13/16 (new all time high) 63.7% gain. PG- 91 15/16 (-2.2% from the all time high reached 7/6) 23.6% gain. BMY- 120 1/4 (new all time high) 51.5% gain. AIG- 148 3/4 (-0.1% from all time high on 7/6) 45.5% gain. CSCO - 94 1/4 (-0.3% from all time high reached on 7/1) 76% gain! F- 59 7/16 (-0.5% from all time high on 7/6) 117.2% gain! MCD- 73 (-1.5% from all time high the day before) 39.4% gain AXP- 114 1/2 (new all time high) 35.7% gain These dozen stocks account for 71.2 points out of 100.5 points gained by the OEX, or 70.8% of the rise, while their total weight is only 41.2% of the OEX now, and less then 35% on 8/6/97. Were those stocks not included in the index, it would have risen only 45 points, or 9.6% instead of the actual 21.4% gain. Without the daring dozen (all other index member gaining weight accordingly) the OEX would have been on 515 points on 7/8/98. Naturally, this is all math and not real, because a large part of the funds invested in those stocks went there because they are index stocks. But the point is to show how narrow was the rise of the past 11 months since the last significant high. ATG