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June 20, 2006
Follow-up to "Flight to quality", Tues., 6/20/2006 5:15 PM
The following chart shows the comparative weakness of the U.S. indexes between the last FOMC decision on May 10 and the close today.
The Dow 30 is in black, at the top. Then the S&P 500 in blue, followed by Nasdaq Composite in green, and the Russell Small Caps in red at the bottom.
This chart reflects where each of the other indexes would be trading if on May 10 they were priced equal to the Dow 30. For example, today Nasdaq closed at 2107 and the Dow 30 at 10974. But since May 10, the Nasdaq in Dow 30 terms would have closed today at about 10500.
Clearly, traders are worried about the move by central bankers to tighten global liquidity. The most speculative elements of the market are always the first to get sold.
The universe is unfolding as it should.
Posted by Posted by Bill Cara on June 20, 2006 05:15:24 PM | Category: Cara Today in the Market