The Dow Is Down for the Year

April 19, 2024

You can now add the Dow Jones Industrial Average to the list of indexes that are DOWN for the year so far.

I've argued many times that the Dow Jones Industrial Average is the world's most important stock market index.

And while I'm not going to get into all the reasons again today, I'll just show you the chart of the S&P500 and Dow Jones Industrial Average going back 60 years.

They move together...

Meanwhile, the majority of stocks on the NYSE and Nasdaq are down for the year as well, I think the bigger story here is the market losing leadership.

The largest weighting in the Large-cap S&P500 and Large-cap Nasdaq100 is Technology.

The largest weighting in the Small-cap Russell2000 Index is Technology.

Here is Large-cap Technology making new 3-month lows yesterday and Small-cap Technology making new 5-month lows.

Remember when these used to be leaders?

You're also seeing Consumer Discretionary making new 52-week lows relative to the S&P500.

But more importantly, in my opinion, look at Discretionary vs Consumer Staples making new 5-month lows.

This ratio between Consumer Discretionary and Staples historically moves with the S&P500. So this divergence really stands out:

The trend for the stock market is NOT up.

It has NOT been up.

We've been talking about this for months.

So while there were almost no new 52-week highs yesterday on the NYSE, Copper Futures once again went out at new 52-week highs.

There are things working in this environment.

But it's up to investors to adapt to changes in the market.

Fortunately for us, most investors don't have the ability to do it, whether it's because their too lazy or because they're just not mentally strong enough to do it.

These human flaws are what we try to take advantage of here every day.

It's not about fundamentals. It's not about the economy. And it's not about who the President is.

It's about finding where investors are most vulnerable, and then pressing them hard.

Last year they were scared, underexposed to stocks, worried about recessions. We were buying stocks very aggressively purposely trying to leave those investors behind.

Now, the vulnerabilities in today's market are too much exposure to Technology and last year's winning stocks, and little to no exposure to Commodities and Natural Resource stocks.

Investors are down.

Now is the time to take advantage.

We discussed all the ways we're doing that on this week's LIVE Conference Call. Premium Members check that out here.

And if you're not already a Premium Member of ASC Research, what are you waiting for?

Click here to get access to this week's LIVE Call, download the slides and check out all the trade ideas.

*By the way, I purposely mislabeled the chart above with the Dow Jones Industrial Average and S&P500, just to reiterate how difficult it is to differentiate between the two.

They move together. See?

Click here to join us in a more official capacity.

It'll be the best decision you'll make this year.

See you in there!