The Nasdaq has outperformed the S&P 500 and Dow Jones Industrial Average year to date, and it is actually up on the year while the other two are down between 3.5% and 6%. Below we highlight candlestick charts of the Nasdaq 100 and S&P 500 ETFs (QQQQ and SPY) since last September. As shown, QQQQ has performed much better off of the recent lows than SPY, and it is currently bumping up against resistance at its January highs. SPY has much further to go to even reach its January highs.
So how does this recent Nasdaq performance affect the index's ratio with the Dow? Below is a chart of the DJIA/Nasdaq ratio since the start of 2002. When the line is rising, the Dow is outperforming the Nasdaq, and vice versa for a falling line. After getting slaughtered versus the Dow from August 2008 to November 2008, the Nasdaq has been outperforming. And judging by the range of the ratio over the past few years, this trend could continue for some time.
Comments