NEW YORK, Aug. 25 -- Tell someone to watch the Nasdaq and they will pull up the Composite, because that is the number the evening bulletins read out. They will believe they are watching close to 3,000 American companies. They are, in practice, watching about a hundred.

Eastern Herald measured it. Across the 125 trading sessions from late February to Monday, the daily returns of the Nasdaq Composite and the Nasdaq 100 moved together with a correlation of 0.9665. The median gap between them on a given day was sixteen hundredths of a percentage point. On 119 of those 125 days they went the same direction, and on most of them by very nearly the same amount.

The Composite fell 0.63 per cent to 26,014.70 on Monday afternoon in New York. The N...