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On Dec 16, 10:44am, Mike Gossland wrote:
> Subject: Dow Jones Theoretical Highs and Lows
>
> I was once concerned about the same thing with Signal.
>
> If I recall correctly, it turned out there were two Dow
> Jones indices being broadcast - $INDU which agreed with
> numbers quoted in the newspaper, and another one called
> $DJ. This second one gave "theoretical" highs and lows - that
> is the hypothetical values the Dow would show if all its component
> shares hit their intraday highs or lows at the same time.
> I found this to be of little use, so I only watch $INDU now.
If I remember correctly, the difference crops up in a lot of
places. I think Investor's Daily for example shows theoretical
(they did when I checked a couple of years ago), so it was easy
to have a conversation with someone about the action in the DJIA
that day, and be using different numbers. Of course, the Wallstreet
Journal (a Dow Jones publication), by definition, gets it "right".
I suppose that now that there are DJIA options and futures this
may begin to matter more. But do you really want to pay Dow Jones
$1 a month real-time, or $0.25 a month delayed, for the privilege
of getting the "official" version?
For DBC/Signal real-time users, it might be interesting to
plot the ratio of $DJ to $INDU, or the correlation coefficient
just to see how wildly different these numbers are. My guess
is that it won't make difference which series you use, as
long as you are consistent.
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| Gary Funck, Intrepid Technology, gary@xxxxxxxxxxxx, (650) 964-8135
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