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Joined: 28 Dec 2005 Posts: 12643
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Posted: Sat Jul 01, 2006 3:04 pm Post subject: Trading Relative Value |
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The daily charts below show the relative values of SPY OIH IWM DIA and MDY compared to their early-Jun tops, 200 and 50-day MAs, etc. Oil stocks are a large component of SPY. So, OIH is included. Large caps, i.e. SPY and DIA, outperformed small caps, i.e. IWM, and mid-caps, i.e. MDY, recently.
On Fri, IWM was more volatile than the other four ETFs, falling to just over 70 1/2, rising above 71 1/2, falling to 71, and then rising to about 72 into the close. So, IWM may be a better trading stock for options and daytrading. However, currently, SPY is relatively overvalued, and more diversified than DIA (with 500 instead of 30 components), which is also relatively overvalued, although less volatile.
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