Long-Term Trend Analysis
NASDAQ vs. DJIA
Timeframe (1-3 years) NASDAQ outperforms.
The Nasdaq has held onto the march lows so far while the DJIA has broken through its support. What are the charts saying? It says the NASDAQ is still the top of the competition in the global world, while the DJIA may just be losing its competitve edge all together. After the NASDAQ's high flying bust from 5,048.62 in the year 2000, the Nasdaq, now 8 years later, is only sitting at 2257, which is a good 50% away from its peak. As our banking system, our consumer, our auto giants, and many other moving economic parts settle into the new paradigm of globalization, the DJIA will have a tougher time because it has lost its competitive edge as the "father" of world markets, and now is heading towards the "grandfather" of world markets, while the technology heavy NASDAQ is still the blueprint for modernizing economies and is passing the test here.
As we look at what the chart and this recent breakdown of the DJIA vs the NASDAQ holding onto its support, the NASDAQ could now be the one to lead. It's proven that it does not want to go below the March lows, so far, while the DJIA has already penetrated through these levels. Thats why the Nasdaq will outperform relative to the DJIA going forward. This also holds well to the SOXX - PHLX SEMICONDUCTOR SECTOR INDEX theory I posted about earlier in the year.
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