Don't get me started The list is endless, GLW was nice for me as well... selling $40 straddles on JDSU, those were the days... arb.
The SPX picture is about the same as the Dow one. As NDX and SPX do not have the same long term history. They cannot properly illustration the point that the US mkt moves in range expansion cycle and contraction cycle. Notice in the original chart, going all the way back in history, all range expansions lead to major mkt corrections. The level of % range that starts such corrections are all at about the same level. The latest 2000 top is no difference. We were at such high % range level back in Jun this year and the current % range decline is very odd because it is not associated with similar level of decline in price comparing to the other historical periods.
lawrence, not to diminish you points as they are valid, do you not believe that the "ever changing" dow components and weightings would make historical range expansions a mute point ? furthermore, it appears to me, that the sp500 would more accurately reflect future price simply due to more data points across a wider spectrum ? best, surfer
Here is the SP chart. It starts at 60% from the left side of the DJ chart. They do look very similar indeed And you are right, due to SP500 having more components, the percentage value is about 1% lower than the Dow one all the time. Thus the SP500 is more balanced than Dow, but not as balance as we've hoped for
Here is the NDX chart for comparison. We have even less data in this one (thats all I get). It does not look like the SP or DJ chart at all. As the NDX is mkt cap driven only, there is no balance off effects among the components. Should be of interest to those who trade nasd stocks and index.
as of this writing, Sunday 8:30 PM PST, looking at the "Saddam Gap" on my charts, apparently I am wrong and will look to cut my loss as well as I can. Glad it is only 1 Dow $5 contract. Fortunately I am conservative when trying to pick a reversal point. I only add size when I'm "in the money". To answer your question directly, as of Friday's close I wasn't too worried about being wrong about the top 100 points - there is definitely a strong uptrend on the daily charts but also on anemic volume so it could just as easily have corrected next week. However, with the Saddam news, I am definitely the wrong way on this trade - now we'll see if the Big Money uses this as an opportunity to sell and profit take. I'll take a loss, the only question will be how much... like anyone else who is short and has + news gap against. Living and Learning, Paul
Now if 250 points on the DOW, 10000 to 10250, a step already achieved, is taken as 5% then it will only take another 19 such steps to reach 15000. I'm not going to hold my breath of course. The 10,000/12000 zone ahead is going to very interesting. But for sure I do not rule out major pullbacks .. its just going to add to the excitement, right? Bottoms up .. 2004!