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Nadeem Walayat Financial Markets Analysiis and Trend Forecasts

Dow Jones Makes a Fake New High Whilst most of its Component Stocks Don't !

Stock-Markets / US Stock Markets Oct 13, 2006 - 09:00 PM GMT

By: Nadeem_Walayat

Stock-Markets

As the Dow Jones posts new record highs this month, there is something strange going on with the Dow components where most of them are NOT making new highs !!!

So how many Dow Components are making NEW ALL TIME highs this month ?
FIVE ! That's 5 out of 30 are making new all time highs - WHILST the Index makes NEW highs

How many trading more than 10% below their all time highs ?
TWENTY - Two thirds of the Dow Stocks are trading more than 10% Below their all time highs.

How many are trading more than 20% below their all time highs ?
EIGHTEEN - More than half the Dow 30 Stocks are trading 20% Below their all time highs.

And here's a real shocker ! How many stocks are trading more than 50% ! Below their all time highs !
FIVE DOW STOCKS are trading more than 50% below their all time highs - THATS the same number making new all time highs !

So where am I going with this analysis ? ...... In the run up to the US Election the Dow Jones is Making NEW All time highs, when most of its components are nowhere near making new highs, does this or does this not smell of market manipulation ?

The situation is even worse when you consider the stocks that have been REMOVED from the index ! I.e. Eastman Kodak off 75%, International Paper off 45%. Those that say the markets are not manipulated, then who do you explain these facts ?


Table of ALL Dow 30 Stocks

Name
Last
Change
Percent
YTD Percent
Year High
All time high
% from High
ALCOA INC
26.64
0.04
0.15%
-9.91%
36.96
45
-41%
AMER INTL GROUP INC
67.27
-0.08
-0.12%
-1.41%
71.09
71.09
-5%
AMER EXPRESS INC
58.02
0.13
0.22%
12.75%
58.02
58.02
0%
BOEING CO
82.39
-1.25
-1.49%
17.30%
89.58
89.58
-8%
CITIGROUP INC
50.38
0.2
0.40%
3.81%
51.33
55
-8%
CATERPILLAR INC
69.08
-0.17
-0.25%
19.58%
82.03
82.03
-16%
DU PONT E I DE NEM
45.08
-0.04
-0.09%
6.07%
45.75
85
-47%
WALT DISNEY-DISNEY C
31.11
-0.19
-0.61%
29.79%
31.59
44
-29%
GEN ELECTRIC CO
35.98
-0.24
-0.66%
2.65%
36.48
61
-41%
GEN MOTORS
32.99
0.33
1.01%
69.88%
34
94
-65%
HOME DEPOT INC
36.9
-1
-2.64%
-8.84%
43.95
70
-47%
HONEYWELL INTL INC
42.61
0.3
0.71%
14.39%
44.48
68
-37%
HEWLETT PACKARD CO
38.86
0.44
1.15%
35.73%
39
69
-44%
INTL BUSINESS MACH
86.08
1.38
1.63%
4.72%
89.94
138
-38%
INTEL CP
21.6
0.11
0.51%
-13.46%
27.49
76
-72%
JOHNSON AND JOHNS DC
64.58
-0.26
-0.40%
7.45%
65.88
70
-8%
JP MORGAN CHASE CO
48.16
-0.1
-0.21%
21.34%
48.57
65
-26%
COCA COLA CO THE
44.02
-0.03
-0.07%
9.20%
45.4
88
-50%
MCDONALDS CP
42.11
-0.12
-0.28%
24.88%
42.46
50
-16%
3M COMPANY
75.4
-0.03
-0.04%
-2.71%
88.35
90
-16%
ALTRIA GROUP INC
79.63
0.85
1.08%
6.57%
85
85
-6%
MERCK CO INC
43.2
0.44
1.03%
35.81%
43.54
90
-52%
MICROSOFT CP
28.37
0.15
0.53%
8.49%
28.69
60
-53%
PFIZER INC
27.59
-0.06
-0.22%
18.31%
28.6
50
-45%
PROCTER GAMBLE CO
62.13
-0.28
-0.45%
7.34%
63.74
63.74
-3%
AT& T INC.
33.6
unch
unch%
37.20%
33.76
60
-44%
UNITED TECH
66.5
0.12
0.18%
18.94%
66.89
66.89
-1%
VERIZON COMMUN
37.05
0.06
0.16%
23.01%
38
68
-46%
WAL MART STORES
48.46
0.14
0.29%
3.55%
50.87
70
-31%
EXXON MOBIL CP
68.4
0.75
1.11%
21.77%
71.22
71.22
-4%

 

So How is the Dow being manipulated higher ?

The Buying of Dow Futures contracts by institutions such as the Fed and politically motivated financial instituions, wanting to manipulate the market, cash values of those stocks that are more susceptible to raising the index are bought via arbitrage programs that look for differences between the cash index and the futures market, thus most components (low priced dow stocks), don't factor into the arbitrage programs buying activity.

Why ?
Thats obvious, in the run up to the US Mid-term Elections in November. There could be a case of something similar with Crude oil, but thats a seperate article ;)

Nadeem Walayat

(c) MarketOracle.co.uk 2005-2006

Disclaimer - This Analysis / Forecast / Trade Scenerio is provided for general information purposes only and not a solicitation or recommendation to enter into any market position, and you are reminded to seek independent professional advice before entering into any investments or trading positions.
The Market Oracle is a FREE Financial Markets Forecasting & Analysis online publication. We aim to cut through the noise cluttering traditional sources of market analysis and get to the key points of where the markets are at and where they are expected to move to next
! http://www.marketoracle.co.uk

This article maybe reproduced if reprinted in its entirety with links to http://www.marketoracle.co.uk


© 2005-2019 http://www.MarketOracle.co.uk - The Market Oracle is a FREE Daily Financial Markets Analysis & Forecasting online publication.


Comments


14 Oct 06, 21:36
Re: Dow Jones Makes a Fake New High Whilst most of its Component Stocks Don't !

So how high does the Dow have to go to make a new high in realterms?


Nadeem_Walayat
14 Oct 06, 21:39
Re: Dow Jones Makes a Fake New High Whilst most of its Component Stocks Don't !

In real-terms the dow would need to rise above 14,800 to make a new REAL high



30 Oct 06, 03:32
Re: Dow Jones Makes a Fake New High Whilst most of its Component Stocks Don't !
Yet this economic "resilience" on Wall Street isn't being felt on Main
Street. The vast majority of the American working family is simply being
squeezed by high energy costs, high or no healthcare costs an skyrocketing
college tuition costs. This is NOT the economy we enjoyed in the 1990's -
and it wasn't just the dot.com sector which benefitted.

Latest Gallup poll shows over 2/3 (68%) of Americans think this country is
headed in the wrong direction. Only 30% believe everything is OK. That has
been a long term trend and has actually worsened over the past year.

Sinclair...

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