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.


Wednesday, September 26, 2007

Market Sentiment

Dow 20= 2
Nas 16= 1
S&P -1=-1
Ftse -69=-1
Nik 89= 1
Futures -41=-1
Market Sentiment 1

THE sharemarket continued its record run yesterday, underpinned by solid gains in the big miners, BHP Billiton and Rio Tinto.

The ASX 200 index finished 31.5 points higher at a record 6483, eclipsing the previous best close of 6451.5, set on Monday.

The All Ordinaries picked up 29.8 to a record 6490.9, beating Monday's high of 6461.1.

Both indices also claimed new intraday records, with the ASX 200 index peaking at 6509.6 and the All Ordinaries hitting 6515.2.

Plenty more where that came from, according to the futures players. The December share price index contract finished the day at 6559, up 57 and 76 more than the physical, on a volume of 22,326 contracts.
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