Nasdaq 100 Equal Weight Index Paints a Different Picture
- Posted by JC Parets
- on December 18th, 2012
You might think that the Nasdaq has been lagging some of the other major US equity averages lately. And after a quick glance at the Nasdaq100 ($QQQ), it’s a fair point. But remember that this disaster of an Apple stock is close to 20% of that index. Apple lost almost 30% of its value in just 3 months. I guess the 100B in cash and “low” p/e ratio wasn’t so important after all.
Now, looking at the Nasdaq100 in a different way, it actually turns out that they’ve been the leader. While the Dow Jones Industrial Average, S&P500, Russell2000, and Midcap400 are still below their September highs, the Nasdaq100 Equal Weight ETF ($QQEW) is already challenging those highs.
So basically, if you take $AAPL’s monster weighting out of the equation, the Nasdaq100 looks great:
Look at the lower window in the chart. How about that outperformance in the Equal Weight Nasdaq100 since the $AAPL destruction began?
We can have a long philosophical discussion about price and cap weighted averages. I have my feelings on that, like $IBM being the most important stock in the Dow Jones Industrial Average while Alcoa is almost irrelevant. But that’s a topic for another blog post.
Full Disclosure: Nothing on this site should ever be considered to be advice, research or an invitation to buy or sell any securities, please see my Terms & Conditions page for a full disclaimer.blog comments powered by Disqus
J.C. Parets is the Founder & President of Eagle Bay Capital, LLC. He is a 10-year veteran and Market Technician who actively manages money incorporating Technical Analysis and Behavioral Finance into his practice. JC’s work has been featured regularly on CNBC, Fox Business, Bloomberg, Business News Network, Wall Street Journal and Yahoo Finance among many other financial media outlets. More...
- The Problem Now Is The Overhead Supply
- This Bullish Base In Cotton Is Almost Complete
- Is This Why The S&P500 Stopped Going Up?
- How Low Is Apple Going To Go?
- The Dow Jones Industrial Average And Its 200 Day Moving Average
- It’s Almost Time To Buy Crude Oil Again
- Is Healthcare Due For A Collapse?
- Are Emerging Markets In Trouble?
- A Look At The Euro From The Top/Down
- Is John Deere Finally Ready To Break Out?
Archive by Year