Quote from Rearden Metal:
I'm confused as to why any professional trader would watch the DJIA at all. An obsolete & irrelevant 'index' of just 30 stocks, I removed that shit from my screen sometime last century.
SSO would be a much better double-weighted representation of the overall market.
Whoa. Such scathing words. The way you gauge a professional is how you pay your taxes, not a chest-pounding self-proclamation. Ditto for dinking with levered ETF's.
Simple answer, you watch it because everyone else does.
Only 30 stocks, Not representative of "industry". Couple shills in there. INTC and MSFT. Both of which are unique ALSO being in the Nasdaq 100 and SPX. Dinosaurs are eventually removed, making the index a rig.
Operative word is rig.
Gains in one issue mask the carnage in another with no net change in the index. For the day or swing.
Sheer magnitude. Volume x Delta of EACH issue.
The specialists in these are old masters relative to the ax in the ABC company with a miniscule fraction of the daily volume.
Price movement is price movement regardless whether the underlying company makes buggy whips, potato chips, or IC chips. Gee that rhymed; and.......... all extracted dollars spend the same at the hot dog stand.
A couple of January's ago GM doubled in one month to $34ish. Get it?
