ok cant wait it is wednesday, page-7

The above chart shows the RSP - ETF tracking the performance of an equal-weighted SP500.

SP500 itself is a market capitalisation index. The Index is calculated using the market capitalisation of the stocks in the Index. The Dow 30 stocks contribute disproportionate weight to the Index. (This is why the Dow 30 and SP500 have such a high correlation - around 95%.)

An equal weighted Index gives equal weight to all stocks. So a small cap stock contributes as much weight as a large cap stock like a Dow 30 stock.

Is there an advantage? Depends on what you want to measure. But an equal weighted index introduces some element of breadth into the index. We often look to breadth to provide some idea of the internal strength of the market. (That's why we look at the Small Ords in Australia and Russell2000 in America.)

The chart of RSP shows a large sloppy Head and Shoulders pattern. The Head is actually comprised of a triple top.

The H/n/S Pattern on RSP has completed. It's a relatively reliable chart pattern. This suggests more downside in the future.

Redbacka