STOCKS

Big Dow stocks handily outperformed in 2011, but recent action in the Advance/Decline (A/D) line suggests the Dow could be more vulnerable on a correction than the now-lagging S&P 500.

With JPMorgan Chase (JPM) set to report earnings before Friday’s open, the stock market is getting ready for next week’s heavy schedule of earnings reports. Many Dow components are scheduled to report next week, including International Business Machines (IBM), Microsoft (MSFT), and Intel (INTC), which are all scheduled for Thursday, January 19.

The Dow Industrials clearly outperformed the S&P 500 in 2011, but so far in 2012, the Spyder Trust (SPY), which tracks the S&P 500, has done about 1% better than the SPDR Diamonds Trust (DIA), which follows the Dow Industrials. But do the market internals and other technical factors favor one index over the other as we enter 2012?

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Chart Analysis: This percentage change chart (courtesy of TradeStation.com) shows the performance of the SPDR Diamonds Trust (DIA) and Spyder Trust (SPY) since the start of 2011.

  • DIA is now up just about 7.87% during this period, though it was up 10% in July. The highest gain (10.8%) occurred in May
  • Thanks to the strong performance so far in 2012, SPY is now up just over 3%. It achieved a maximum gain of 8.5% in April 2011

NEXT: Daily Charts of These Primary Dow, S&P 500 ETFs Compared

Tickers Mentioned: Tickers: SPY, DIA, JPM, IBM, MSFT