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 Nifty 50 Hits All-time Highs, Now What?
- Thinking Out Loud In Mid-January
- Is Malaysia Where We Want To Be This Year?
- Wait For Your Pitch!
- ABC News: Home Builders Rally To Start 2015
- BNN Appearance: Crude Oil, Bonds and Homebuilders
- Will Real Estate Be The Big Winner In Q1?
- Bonds Continue To Outperform Stocks
- FOX Business: US Stocks & Crude Oil for 2015
- End Of The Year Special Offer
Archive by Year