The Dow-To-S&P 500 Ratio

The Dow has been beating up the S&P 500 this year. The two indexes generally follow each other, but some gaps do open up.

The Dow is currently 9.758 times the S&P 500 (I mean index values, not market value). This is close to the highest level in three years. As a very general rule, the ratio rises as economic recessions approach.

On November 20 and 21, 2008, the Dow-to-S&P 500 Ratio closed above 10. That was the first time it happened since November 1966. If the next two months are like the last two, we might break 10 again very soon.

Posted by on December 19th, 2011 at 1:44 pm


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