Random thoughts: One thing that troubles me about long, long-term technical analysis is that the broad market indices have changed so much over the years that historical data is marginally useful.
Dow Jones 30 have changed.....does the DJ30 from 1950 have any relation to the DJ30 from today? My answer: No, because the financials weren't represented in major indexes from the past.
The modern SPX is only ~17 years old.....the
old SPX and its chart cited so often bore more resemblance to the old Dow Jones 30. Today's SPX has over 20% devoted to financials....the percentage of financials represented in the major indexes from 1950?
Ideal solution: Russell 1000 back-calculated to 1929. Anyone have time or the inclination to pay Russell to do that?
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History Highlights
[back to top]1923 -- Standard de Poor's develops its first stock market indicators. The new stock indices cover 26 industry groups and 233 companies. Also, S&P introduces base-weighted aggregate technique to gauge stock market performance.
1926 -- Standard & Poor's creates a 90 Stock Composite Price Index, comprising 50 Industrials, 20 Rails and 20 Utilities. The new composite has a base period of 1926=100 and is calculated and published weekly. Historical values are available going back to 1918. The "233" and the industry group indices are re-based to 1926=100 and are calculated and published weekly.
1928 -- Standard & Poor's 90 Stock Composite Price Index is calculated and published daily.
1941 -- The "233" grows to 416, comprising 72 industry sub-groups. The new "416" and the 90 Stock Composite are re-based to 1935-39=100
1957 -- The "416" becomes the Standard & Poor's 500 Composite Stock Price Index. Thanks to technological advancements, computers are introduced and permit the "500" to be calculated and disseminated at one-minute intervals throughout the trading day. In order to create a lengthy historical time series, the new "500" is linked to the 90 Stock Composite Price Index-daily S&P 500 Index prices become available back to 1928. The original "233" and "90" stock indices have evolved into the modern "500". The "500" now consists of 425 Industrials, 60 Utilities and 15 Rails, and has a base period of 1941-43=10.
1976 -- Effective July 1, the "500" is restructured to become a composite consisting of 400 Industrials, 40 Utilities, 40 Financials and 20 Transportation stocks. Up to this point, only New York Stock Exchange issues have been included in the "500". The restructuring introduces Over-The-Counter and American Stock Exchange issues into the computation.
1983 -- Effective November 30, Standard & Poor's revises the "500" to reflect the American Telephone & Telegraph (AT&T) divestiture. The seven regional telephone companies spun off by AT&T are added to the 40 Utilities group, replacing two electric, two gas and three independent telephone utility stocks. Parent AT&T is kept in the miscellaneous category of the 400 Industrials group.
1986 -- On June 13, Standard & Poor's begins disseminating S&P 500 Index values on a 15-second interval basis versus the previous one-minute calculation.
1988 -- Effective January 1, Standard & Poor's calculates the Total Return -- return including reinvestment of dividends -- on the S&P 500 Index on a daily basis. Previously total return numbers were only available based on monthly reinvestment.
1988 -- Effective April 6, the S&P 500 is restructured to remove the "limits" set on the four major industry groups. As a result, from this point on, the 400 Industrials, 40 Utilities, 40 Financials and 20 Transportations are allowed to "float". Substitutions can be made between categories, permitting S&P to respond more quickly to shifts in representation of major market sectors.
1989 -- On February 8, Standard & Poor's removes RJR Nabisco from the S&P 500, reflecting the completion of the largest corporate takeover in U.S. history. RJR's huge market value of $22 billion is replaced by $2.3 billion First Union, a regional bank based in North Carolina.
1989 -- Effective October 1, Standard & Poor's begins its "preannouncement" policy. Whenever possible, S&P will announce additions and deletions up to five business days in advance of the actual change in the Index. The policy change is designed to ease order imbalances that typically happen to stocks just added to the 500.
1992 -- In May 1992 S&P/BARRA Growth & Value style indices are introduced. Based on price/book ratios, these indices divide the S&P 500 Index into two mutually exclusive indices representing a 50/50 split of the 500's market value according to price/book characteristics.
