Identical curves

Company shares traded in New York are followed by three main indexes, the Dow Jones, the NASDAQ and the Standard & Poor. Though some companies figure in all three indexes, these three are supposed to measure different aspects of the market. The Dow Jones represents the thirty companies with the largest capitalisations, the NASDAQ encompasses dotcoms and the S&P covers a wide range (500) of different enterprises. However, despite their differences, the last two sessions of trading produced almost identical curves for all three indexes. They do tend to be similar because they measure the same market, but they should not be facsimiles. This could be pure coincidence, or maybe computers took over during the New Year break and they all have the same programme. Or it might be the result of secretive manipulations by the White House Plunge Prevention Team (1). If these carbon-copied curves continue next week, coincidence will become farfetched and vacations will be over, which will leave the PPT as the principal suspect. An alternative explanation could be that 25 companies included in the Dow Jones index outweigh the other 475 that are part of the S&P 500, that 5 companies in the Dow Jones index outweigh the other 3000+ that make up the NASDAQ composite index, and that 30 companies determine all the ups and downs of all three indexes. This could be the case, as for example the S&P Thursday Jan. 03, in the last half-hour of trading 246.78M shares were sold and brought the index down by 6.46 points. This was followed by sales of 129.43M shares that pushed the index up by 45.7 points. A similar thing happened Monday Jan. 07, when 331.26M shares took 8.32 points off the index, whereas the subsequent 155.13M shares sold added 30.85M points. In the first case the effect of a bit more than half as many shares was seven times greater. And in the second case a bit less than half had 3.7 times as much effect. (2)

1. https://en.wikipedia.org/wiki/Working_Group_on_Financial_Markets

2. https://finance.yahoo.com/quote/%5EGSPC?p=^GSPC

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