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Beware of the Russell 2000, but should you buy the Dow Jones Industrial Average?

There has been a bifurcation in the U.S. stock market recently.

This is unusual because, typically, markets move in relative tandem. This time, however, the four major markets in the U.S. are not moving the same way, and it’s important for us to understand the differences. If we can identify the differences, we may just be able to identify opportunities as well, but it may not be what you think.

The four major markets are the Dow Jones Industrial Average DJIA, +0.49% S&P 500 Index SPX, +0.19% Nasdaq 100 Index NDX, -0.28% and Russell 2000 Index RUT, -0.20% Some might argue that the Nasdaq Composite Index COMP, -0.26% is more important than the Nasdaq 100, but the Nasdaq Composite also has many small-cap stocks that are already included in the Russell 2000, so the Nasdaq 100 is a better indicator overall.

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