Don’t Fight Papa Dow
That’s how I learned it. You’ll hear my friend Ralph Acampora say that all the time!
“You Never Want To Fight Papa Dow”
My interpretation is that there is wisdom in the Dow Components. If you want to know which way the market is headed, focus on those 30 stocks.
I’m not going to get into the discussion about whether the Dow is the best index or not. I’ve made my case before and stand by it today more than ever. If you have a problem with Dow Jones or Standard & Poors, stop complaining about it and just go build a better index. It’s not that hard. We do it every day.
The Dow Jones Industrial Average, however, is a perfectly good index and gauge of stock market strength or weakness. One of the best parts is that there are only 30 components!
Hellooo??? Do you want to go through 500 stocks? Or 3000 in the case of the Russell3000?
Or just 30?
If all the charts of these indexes look pretty much exactly the same, doesn’t an easy 30 stocks make the most sense? [Read more…]