PLAYING FTSE WITH THE DOW
In John J. Murphy’s 1991 book “Intermarket Technical Analysis,” he notes a tendency for the British market to lead the U.S. stock market at tops.
Although perhaps a controversial notion to some elements of the trading community, Murphy provides a number of visual examples of this phenomenon which were seen in early 1986, late 1987, and late 1989.
Looking back further, he writes that “U.S. stock market peaks in 1929, 1956, 1961, 1966, 1972, and 1976 were preceded by tops in British stocks.”
More recently, around the Y2k U.S. top, the FTSE 100 index’s CURRENCYCOM:UK100 record closing high was on December 30, 1999, whereas the Dow’s DJI record closing high was on January 14, 2000. Thus, the FTSE led the Dow’s high by 9 trading days (tds):
Ahead of the 2007-2009 Financial Crisis, the FTSE had not exceeded its 1999 record high. Instead, it put in a lower high on June 15, 2007….
