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 GMTAs 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
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