Think Financial Markets - Excellence In Trading Financial Markets

Think Financial Markets - Excellence In Trading Financial Markets

Market Sentiment

It is essential that we have a general feeling of which direction our market may trade on any given day.

To achieve this it is necessary to be aware of how global markets have performed on the previous day as well as during the night.

We measure this sentiment by allocating points to certain global indicies to measure their strength or weakness.

We look firstly to The Dow Jones Index. This index is one of the world’s most influential and as such rates very highly in determining the daily sentiment.

We allocate between 2 pts plus or minus if the overnight movement is less than 50pts or 4pts if over 50pts

The next most important indicator is the SPI200 which is the futures contract covering the Australian markets top 200 stocks and trades almost 24hours per day.

We also allocate between 2 and 4 pts as per the Dow.

Then we add both the Nasdaq and the S&P 500 indicies from the U.S they are allocated points as follows

Nasdaq above /below 30 ,plus or minus 2pts or less than 30, 1pt

S&P 500 above /below 15, plus or minus 2pts or less than 15, 1pt

Next we add the FTSE 100 results from England and the NIKKEI 250 from Japan which are allocated 1pt for a plus or minus result.

The maximum points on our table are 14 and variations of this will gauge bullish or bearish sentiment.

Other very important overnight markets to be taken into consideration when trading the Australian market are firstly the strength or weakness in the Aussie dollar versus the US dollar and we rarely have a good day if the commodity markets have been sold down during the night.


Friday, September 21, 2007

Market Sentiment

Dow -49=-1
Nas -12=-1
S&P -10=-1
Ftse -31=-1
Nik 32=+1
Futures -22=-1
Market Sentiment -5


THE sharemarket closed in positive territory yesterday, underpinned by strong gains from resources giants BHP Billiton and Rio Tinto.

The ASX 200 index closed up 37.6 points at 6393.7, while the All Ordinaries had gained 38.9 points to 6400.9.

On the Sydney Futures Exchange, the September share price index contract closed day trading 48 points higher at 6436, a rather hefty premium to the physical of 42 - the contract closes today - on a volume of 10,163 contracts.

CMC Markets dealer Matthew Lewis said solid gains in base metal prices overnight underpinned a positive performance from the materials sector.

"The key driver was the materials stocks, we saw surging base metal prices overnight … this has flowed on to our big metals and mining stocks like Rio and BHP," Mr Lewis said.

"I think we're also still seeing a positive flow-on effect from the Federal Reserve rate cut a couple of nights ago and we're pretty close to the all-time record again."
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)