AI
Thursday, April 24, 2003 9:43:36 AM
Here's my personal "Is the Crud Running Yet?" Indicator:
It's the DOW divided by the RUT (Russel 2000). The dow is 30 very large caps and the RUT is 2000 small caps.
Theory: One of those traders' rules (that never really seem to have any statistical basis to them) says that large caps usually lead a rally and small caps lag until the latter stages. Thus, as the RUT gets comparatively stronger, (compared to the DOW that is), this ratio should get smaller, since I'm using the RUT as the denominator.
Disclosure: I really have no idea if this one works or not, but I thought I'd post it for the sake of conversation. {g}
Thoughts????????????????????????????
It's the DOW divided by the RUT (Russel 2000). The dow is 30 very large caps and the RUT is 2000 small caps.
Theory: One of those traders' rules (that never really seem to have any statistical basis to them) says that large caps usually lead a rally and small caps lag until the latter stages. Thus, as the RUT gets comparatively stronger, (compared to the DOW that is), this ratio should get smaller, since I'm using the RUT as the denominator.
Disclosure: I really have no idea if this one works or not, but I thought I'd post it for the sake of conversation. {g}
Thoughts????????????????????????????
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