回复：Several mistakes

1) You are right that Dow is a price weighted index. But the reason to compute everything on cap-based is that MMs need to use REAL cash to push a market.

2. It's very reasonable for the correlation definition to be defined purely based on stock cap. If nasdaq goes up for some reason, other index stocks in sp500 must be pushed up in order for sp500 to catch up. O/w, how?

> Correlation is computed using their returns and
> variance over a period. Look up in any corporate
> finance book for details.
This is true based on FA. However, FA can't make the index go higher. It needs real cash to push the stock prices higher and hence the index higher.

> Big market trends are not results of manipulations
A significant market trend I am defining here is not a bull or bear market. It's just a somehow clear trend. For example, naz from 2040 in middle Oct. to 2260 today. Or from 2220 in early August to 2120 in late August.

The point is we just need to watch the major stocks. 80% of the money is in 20% of the stocks. And 80% of stocks have no beef.

The current up trend was significantly driven by MSFT which went up from middle $24s to low $28s. MSFT is up 28-24/24 ~= 16%. Because MSFT accounts for about 15% of Naz, it contributes about 2.24% (0.16*0.15) gain of Naz which converts to 48 points = 2.24% * 2040. (Naz base was 2040 when MSFT was at bottom). What's the Naz gain by points? 2230 (when MSFT was at low 28s 3 days ago) - 2040 = 190.

48 vs 190 ~= 20%

Don't just think about point gains. If MSFT stayed at bottom around $24.50. What would happen? Naz would lose 48 point of gains and it's about 2210. Check the index one-year daily chart, at 2210 right now, it's below (around) 4-month high 2220, then people would be wondering whether it can break 2220 resistance.

Please see the steep trends of MSFT. From ~$27.20 (in early Sept) to ~$24.50 (in early Oct). If it's not manipulation, what is?

In my opinion, indice are always manipulated by MMs.

MSFT may be topping now (I will short it when it breaks down $27.30 which is a down trend confirmation since it's below the current 2nd support $27.30. First support is $27.75).

MSFT has temporariely finished its job and the current on-going trend is boosted by AMZN, INTC, YHOO and EBAY etc. If they are going to consolidate, watch out: the index will be going down. And the current trend may be over.

所有跟帖： 

• Thanks both 131105 and _nobody, your are both HH -6783- ♀ (0 bytes) () 11/25/2005 postreply 03:48:38

• Can't agree more on MMs manipulate indice. -6783- ♀ (436 bytes) () 11/25/2005 postreply 04:02:11

• 回复：回复：Several mistakes -__nobody- ♂ (541 bytes) () 11/25/2005 postreply 07:33:41