New highs deserve attention, yet bear in mind that the DJIA continues to lag behind the market. In fact, its close of 16,580.84 is just pennies above its previous peak on January 3. Then it closed at 253.22 percent of the 2009 bottom, while today new high achieved 253.26 percent of that low.
Yet consider two adverse facts that should tamper any celebrations. First, the DJIA has, and continues, to lag behind the NASDAQ and S&P500. As our diagram clearly shows, these two meters have outperformed the DJIA during this entire recovery. Today’s NASDAQ close is 324 percent of the March 2009 low while the S&P500 stands at 278 percent.
Further, with the NASDAQ close at 344 percent of its low on March 5, as well as the S&P500 close at 279 percent of that low, both indices now stand below their best performance this year.
The news from the Fed provides a further negative slant; its announcement today that it will reduce its monthly bond purchases by another $10 billion, is bound to have a negative impact on asset values.
DJIA .27 percent
NASDAQ .27 percent
S&P500 .30 percent
