Thursday, September 20, 2012

$IYT Unchanged Since June 2008; $SPY, $DIA, $XHB, $IWM, $QQQ Are Up 19-47% (Chart)

Check out this chart comparing the performance of $SPY (S&P 500), $DIA (Dow), $QQQ (Nasdaq 100), $IWM (small caps), $XHB (housing) and $IYT (transports). Since June 20, 2008, $XHB and $QQQ are up over 40%; $SPY, $DIA and $IWM are up over 20%; and IYT is down 0.59%. U.S. equity indexes are trying to effectively price in a weak global economy, which is mainly being driven by the economic slowdowns in Europe and China, and deleveraging and a possible new recession in the U.S. But, they are also pricing in the massive stimulus efforts by central banks globally. It is interesting that U.S. equity indexes, excluding the transportation index, are being driven by the Federal Reserve's QE3 (or QE-infinity) program and not reacting to global trade weakness, which is being priced in via IYT.

Finally something interesting is happening in the market. This is a follow up to my previous post: $SPY, $IYT Decouple as FedEx Lowers Estimates.


ITY, SPY, DIA, IWM, XHB, QQQ since 6/20/2008 (source: Stockcharts.com)

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