NDX to SPX ratio
#1
Posted 20 July 2007 - 09:33 PM
Well going back to 1998, including the 2000 bubble era, this value has not been as high as it's hit lately.. what does it mean?
The closest it came to it was january 00..
http://stockcharts.com/c-sc/sc?s=$NDX:$SPX&p=D&yr=10&mn=0&dy=0&i=p60166438922&a=112437734&r=2407.png
#2
Posted 20 July 2007 - 09:48 PM
#3
Posted 20 July 2007 - 10:09 PM
Just out of curiosity I was comparing the RSI14 of the NDX to SPX ratio, because NDX ran up so fast the past few weeks..
Well going back to 1998, including the 2000 bubble era, this value has not been as high as it's hit lately.. what does it mean?
The closest it came to it was january 00..
http://stockcharts.com/c-sc/sc?s=$NDX:$SPX&p=D&yr=10&mn=0&dy=0&i=p60166438922&a=112437734&r=2407.png
How about the Mother or a Short Squeezes or the Epicenter of Primary 3.
#4
Posted 20 July 2007 - 10:32 PM
#5
Posted 20 July 2007 - 10:39 PM
If you assume that NDX represents speculative segment of the market, and SPX is more or less the rest, then it means that speculation is raging. (Which definitely was the case in 2000).
You could make an argument that NDX represents speculation, since its trading at 35 P/E and SPX is at 18. And NDX is full of sexi tech stocks, and of course semiconductors, that people just can't let go off.
Otherwise... no idea.
Sort of... NDX/IXIC ratio has been pretty high too. Seems speculation is limited to large cap stocks in the Nasdaq.
I think what this means is that even though the SPX may go through a rather decent correction, the NDX won't, because the market maybe repeating the same scenario as 2000, where NDX continues to march upwards while the Dow/SPX headed down (mostly due to financials tanking). As some have noted, likely a good bet going forward is long NDX, short SPX strategy. In fact, there's probably a fairly large sub-prime plunge geared rotation into NDX already.
I have an AAPL fractal that I'm watching, and that says AAPL may head to 160 after earnings release, within 1 month, after which it would mark the peak for that stock.
That would correspond well with the scenario that NDX repeats 2000 scenario of peaking later than Dow.
According to my unreliable sources, AAPL is ~10% of NDX. If that's true, it might single-handedly account for the divergence.
Close, its 7.5% of it..
QQQQ
#6
Posted 20 July 2007 - 10:56 PM
#7
Posted 20 July 2007 - 11:40 PM
If you read the entire page, you can read the fanboi declaring victory over an AAPL critic pretty much right at the top of AAPL price.
AAPL