Big Deal Dow Jones.

So much hoopla about the Dow Jones Industrial Average {Hereafter the Dow} setting new highs, so little meaning to the overall market. First let's face the fact that the Wall Street believes that the man on the street only knows the Dow. Let's also acknowledge that unless you've been hiding under a rock these past couple of weeks and if you have any interest or money in the market you've probably heard that this index of 30 stocks is setting new highs, breeching levels it last saw in the spring of 2000. Today for a brief time the Dow even went over 12,000.

Now for the bad news. On an inflation adjusted basis the Dow is something like 18% below it's 2000 levels. Worse news is that the rest of the market is nowhere near those 2000 prices. Birinyi & Associates published a chart on Oct 13 showing where the rest of the indices are in relation to their 2000 highs. Below are the percentage numbers off their highs that the major indices are currently posting. Their numbers may have changed slightly in the past 2 weeks but they are close enough for you to get the point. Below I've posted the main numbers and a link to the post.

Percentage Off High {based on data from 10/3/06}
S&P 500 -12.6%
Wilshire 5000 -9.7%
Nasdaq Composite -55.6% {Note this number, in some ways still unfathomable!}
Russell 2000 -8.1%
Value Line -5.7
Dow Jones Transports -10.6%

http://tickersense.typepad.com/ticker_sense/2006/10/Dow_new_all_tim.html
Biryni & Associates: Ticker Sense 10/13/06.