Industrial Misconceptions:

The Dow Jones “Industrials” have put up some strong gains as of late with consecutive 500 point gains. Of course those gains are just better than 2%, but the benchmark has seen some nice capital flow into it recently (912 point gain on 5/18). Over the years the index is not representative of the industrials anymore, but rather technology with AAPL CSCO INTC IBM and MSFT. Consumer names like MCD WMT NKE and DIS, and financials like JPM AXP GS and V. But we must pay attention to potential rotations, and it is still very early, but nascent moves into the Dow over the last 5 days shows a move of 4%. Compare that too the Nasdaq and S&P 500 which have gained .4 and 2.2% over the same time period (the Russell 2000 has advanced 6.6%!). Just over a year ago BA was the highest priced name in the benchmark (it is a price weighted index), it now has 9 of the 30 with stronger prices, but it still carries some influence. Let us take a look at the chart below and see if it can give the Dow a boost going forward.

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