Nasdaq Big Cap (Qs) vs Russell 2000: Why Guess?

With the Nasdaq down 1.56% intraday, and the NDX 100 off more than 2%, its time to revisit the issue of sector selection.

We noted earlier this week that Big Cap Tech Continues to Disappoint; Here’s a graphic representation of that:

Russell 2000

Russell_2000

Nasdaq 100 (QQQQ)

Nasdaq_6_months

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Which of these charts is treating your money better? Again, I am forced to ask why guess? Why not wait until big cap tech reveals itself?

John Roque, the excellent Technical Analyst out of Natexis Bleichroeder, uses the following chart to explain that not only is Big Cap Tech not the place NOT to be, but the move against it may only accelerate:

Spx_tech_relative

Category: Investing, Technical Analysis, Trading

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Stephen Moore Gets Slick With the Data

Early this morning, I caught a few minutes of Stephen Moore’s Supply Side arguments on CNBC re Tax Cuts.

Rather than discuss what some have called Economic’s biggest mistake, and what the Chairman of President Bush Council of Economic Advisors Greg Mankiw described in the third edition of his book Principles of Economics textbook as the work of
"charlatans and cranks," I thought I would simply debunk his Capital Gains Tax Cut argument as increasing treasury receipts:

Moore is arguing that since tax reciepts went up after the Capital Gains Taxes were cut in 2003, it should therefore get all the credit. I would respond simply by going to the charts, and pointing out that THE ABSENCE OF CAPITAL GAINS FROM 2000-20003 is the primary reason.

This first chart shows the pre-tax cut period of October 2000 to March 2003; Gee, anyone want to hazard a guess for why Capital Gains Taxes paid were so low after the Nasdaq dropped 78%?

How about NO CAPITAL GAINS = NO CAPITAL GAINS TAXES!

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 Nasdaq 2000-03

200003_nazz

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The second chart shows what happened after the War began in March ’03. Note that the Nasdaq selloff was very similar in depth to the initial 1929 crash.

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Nasdaq 2003-06

2003_06_nazz

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Gee, when markets rally, people pay more Capital Gains! Go figure . . .

(And this is before we even mention increased Housing sales due to half century low interest rates and the potential capital gains taxes there) 

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