De-FANGing The S&P Index:
What’s The Market
Really Up To?

What Most People THINK The Markets Doing . . .

. . . Vs. What the Market is REALLY Doing! . . .

The so-called FAANG Stocks, (Facebook, Amazon, Apple, Netflix and Google), which we've seen account for a disproportionate size of the S&P 500, actually 'skew' the index as shown on our price charts.

So, How Can We Compensate For This Inserted 'Error'?

Use A Special Chart to Subtract the FAANG Stocks!

We need to use an 'Equal Weight' Chart that doesn't give undue influence to just a handful of FAANG stocks like the standard S&P 500 Index does.

The RSP ETF chart above does just that; it gives ALL the stocks in the index an equal weighting in order to get a better indication of the overall Stock Market's conditions that are prevailing as represented by the 'other' 495 Stocks in the Index!

The above 2 charts were captured last week and, if you look closely at the RSP chart, indicate that most stocks were weakening slightly. This RSP chart would have been more useful as to determining market direction to those holding stocks other than the top 5 Faang stocks than the S&P 500 Index alone.

The top chart of the FAANG stocks didn't show any new trend at all.

But, remember, these are only the 5 most popular stocks in the Index and don't represent the overall condition of the Market. After all, those 5 stocks represent just 1% of the whole 500 Index!

Another factor to consider rather than just following 'the crowd'. - George