Dow About To Go To Hell???

Discussion in 'Trading' started by Corso482, Jan 24, 2003.

  1. Trajan


    The Dow does look ugly but I looked at bunch of charts on tech stocks and a lot of them don't look bad. I'm kind of leaning towards the bullish camp in tech. Of course, my only position right now is a short in IBM. I've read Fleckenstein for too long.
    #11     Jan 24, 2003
  2. When I read "hydrogen" and "Arabs" I thought he was going to talk about thermonuke-ular devices. But apparently he belongs to the intellectual elite and realizes violence is less efficient than economics in killing off competing DNA.
    #12     Jan 24, 2003
  3. Agreed, but NAZZ is down 75% since peak; after 20s bubble DOW gave back 90% of gains; that would bring it back to about 4700.

    Also if we follow the same parallel, gets you SP 480ish, and NAZZ 900.

    We'll see
    #13     Jan 24, 2003
  4. So did the 60 minute channel provide guidance, was it meaningful, or coincidental? Well, one can at least say, in this case, the lower boundary of the channel provided a nice objective entry point.
    #14     Jan 24, 2003
  5. dis


    Yet Microsoft's imminent 2-for-1 stock split, for holders of record on Monday and due to take effect Feb. 18, will have a secondary and real effect on the Dow Jones Industrial Average: Essentially, it will make the world's most valuable company a fairly insignificant force in influencing the Dow, which is price-weighted. That means that higher-priced shares count for more than lower-priced ones, no matter the companies' market value. Other indexes of note are weighted by market capitalization.

    The price weighting of the Dow has always made it quirky and somewhat capricious in its motivations. But the Microsoft split will exacerbate the particularly skewed current weightings of the Dow Industrials, in which a couple of high-priced stocks such as 3M and Procter & Gamble dwarf several of the largest companies' stocks.

    (A one-time adjustment at the time of the split will mean the actual 2-for-1 distribution won't impact the index. But Microsoft's lower price from that point on will make its equivalent percentage moves less important than the moves of higher-priced shares.)

    <b>In fact, 3M counts for more in the index than General Electric, Citigroup, Exxon Mobil and Microsoft will after the latter's share split. This is a stark distortion considering that those four heavies have a combined market value of more than $900 billion, compared with $50 billion for 3M.</b>

    With 3M around 128 and P&G around 85 being the two most highly priced stocks in this index, they represent more than one-sixth of the Dow. These are also two of the most defensive stocks in the index, meaning they tend to perform relatively well when the overall market is suffering. This has dampened the downside in the Dow compared with the S&P 500. Add in the fact that the four tech stocks in the Dow make up about 11%-12% of the index versus about an 18% tech weighting in the S&P, and the Dow's defensive characteristics become more obvious. This helps explain why the Dow was down less than 15% in the 12 months through Thursday, while the S&P 500 was off more than 21%.

    It's not to say there's no use in following the Dow, which like Barron's is a Dow Jones & Co. product. In fact, its price weighting makes it act somewhat like an investor's own portfolio, where the day-to-day dollar change is what matters to the owner. But investors should understand that the Dow isn't giving a direct signal on the overall value of the broad market. (source: Barron's)
    #15     Jan 25, 2003
  6. Minime


    I agree with your assessment of the infrastructure requirements, but I think the rewards would outway the costs.

    Here is a good article summarizing the logistics of using hydrogen by the Army:

    #16     Jan 25, 2003
  7. but seriously id be a buyer here if i were long term or investor, buying after the first bomb drops
    #17     Jan 25, 2003

  8. Agreed. IMHO., I think the next month will be much lower for the market.
    #18     Jan 25, 2003
  9. Trajan


    I don't disagree.
    #19     Jan 26, 2003