Rob_Dublin

Studying the Dow / S&P 500 Ratio

This argument is fundamentally flawed as the indexes are not comparable. The Dow is a price weighted index, whereas the S&P is a market-value weighted index. The S&P consequently gives a much better representation of the market than the Dow, which suffers from an arcane calculation methodology. Furthermore, in the present risk averse market climate, you would expect the large-cap-skewed Dow to outperform the S&P.