Geoff Garbacz: Last week, I noted the Dow Jones Industrial Average (INDEXDJX:.DJI) was lagging the other major indexes.
While the S&P 500, Russell 2000 and Nasdaq Composite surpassed their September intraday highs in mid-October, the Dow had not. As such, I have been more positive on the other indexes.
A week later, the Dow is attempting to clear its high set last Tuesday at 15,680.35. As of the end of trading on Wednesday, it has now closed above last Tuesday’s closing price.
With last week’s Federal Open Market Committee announcement, all indexes finished the day lower on Wednesday, Oct. 30. It is interesting that, since then, the major indexes are consolidating gains.
So, the game continues and we need to see if the Dow and, now, the other indexes can move back to a new high or whether a near-term top is being formed.
Several market strategists and technicians have pointed out in the last week that the Russell 2000 is struggling. Wednesday, as an example, it closed with a change of -0.45% vs. the S&P 500 return of 0.43%.
When looking at the Russell 2000, I like to first plot a relative strength line against the S&P 500 (blue line).