6 replies to this topic

[dcengr]

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

[ogm]

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.

[DonBart]

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.

[jawndissedi]

According to my unreliable sources, AAPL is ~10% of NDX. If that's true, it might single-handedly account for the divergence.

[dcengr]

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

[borland]

oqm makes an interesting case for a speculative bubble about to crash. But consider.... - In the 98'-00' period, the RSI came off the oversold level for a much longer time period before peaking, and as you pointed out, at a similar level to today's reading. During that extended period, the $NDX:$SPX ratio levels climbed significantly. While, - In the most recent period, the RSI has risen from the oversold condition for a much shorter period, and during that time period the $NDX:$SPX ratio is only reaching multi-month highs since breaking out of year-to-date highs. So I thinks there's just as strong a case that the current speculative bubble is less speculative than then. Or that the $SPX is now more speculative relative to the $NDX than then. Otherwise.... I haven't got a clue.

[dcengr]

Here's a bit of old AAPL news from the peak of march 2000.. looks like share price had hit about the same level (ie $140ish), but must've split quite a # of times to show $37 at the peak in 2000 in my current chart.

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