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, August 29, 2008

Market Sentiment

Dow 213=4
Nasdaq 29 =1
S&P 500 19=2
Ftse 73=1
Nikkei 15=1
Futures 83=1

Market Sentiment 10
The Australian share market is expected to open stronger after US stocks rallied on a surprisingly big upward revision to second quarter US growth and lower oil prices boosted shares of major industrial and financial companies.

Thursday, August 28, 2008

Market Sentiment

Dow 90=4
Nasdaq 20 =1
S&P 500 10=1
Ftse 57=1
Nikkei -26=-1
Futures 53=1

Market Sentiment 7
The Australian share market looks headed for a strong opening after Wall Street finished higher on better-than-expected durable goods data and a rally in financial shares led by Freddie Mac and Fannie Mae.

US energy shares were led upwards by a rising oil price, as forecasts tipped Tropical Storm Gustav will intensify into a hurricane, as it heads towards key oil assets in the Gulf of Mexico.

Wednesday, August 27, 2008

Market Sentiment

Dow 27 =2
Nasdaq -4 =-1
S&P 500 5=1
Ftse 35=1
Nikkei -100=-1
Futures 6=1

Market Sentiment 3
The Australian share market looks headed for a flat opening after stronger oil prices helped Wall Street finish in positive territory despite renewed fears for the US banking sector.

Tuesday, August 26, 2008

Market Sentiment

Dow - 242 =-4
Nasdaq - 49 =-2
S&P 500 -25=-2
Ftse holiday
Nikkei 213=1
Futures -90=-1

Market Sentiment -8
Local stocks are expected to open weaker after Wall Street tumbled over two per cent on weaker financials.

Monday, August 25, 2008

Market Sentiment

Dow 198 =4
Nasdaq 34 =2
S&P 500 14=2
Ftse 135 = 1
Nikkei -86=-1
Futures 73=1

Market Sentiment 9
Australian shares are expected to start the final week of reporting season on a high, supported by financials, after Wall St rallied on takeover speculation around investment bank Lehman Brothers.

Local resources stocks, however, will come under pressure after the oil price tumbled more than five per cent on Friday and gold and base metals also weakened.

Friday, August 22, 2008

Market Sentiment

Dow 13 =2
Nasdaq -9 =-1
S&P 500 3=1
Ftse -2 =- 1
Nikkei -99=-1
Futures 31=1

Market Sentiment 1
The Australian stock market is expected to open higher after resurgent energy shares helped Wall Street end in positive territory.

Thursday, August 21, 2008

Market Sentiment

Dow 69 =4
Nasdaq 5 =1
S&P 500 8=1
Ftse 51 = 1
Nikkei -13=-1
Futures 37=1

Market Sentiment 7
The Australian stock market is expected to open stronger after Wall St finished higher in a choppy session.

US stocks closed higher after Hewlett-Packard’s strong results and a rebound in energy shares offset investors jitters regarding the future of Fannie Mae and Freddie Mac

Wednesday, August 20, 2008

Market Sentiment

Dow -131 =-4
Nasdaq -33 =-2
S&P 500 -12=-2
Ftse -130 =-1
Nikkei -300=-1
Futures -36=-1

Market Sentiment -11
Local stocks are expected to open lower after US stocks slipped for a second straight day, as financials slipped on further credit jitters and US PPI data fuelled inflation fears.

However, resource stocks may get a small boost after a weaker greenback produced a rally in commodities.

Tuesday, August 19, 2008

Market Sentiment

Dow -180 =-4
Nasdaq -36 =-2
S&P 500 -20=-2
Ftse -5 =-1
Nikkei 146=1
Futures -85=-1

Market Sentiment -9
Local stocks are set to open weaker after renewed mortgage crisis jitters hurt financials and further capitalisation fears of US home finance firms Fannie Mare, Freddie Mac pushed US stocks down.

Monday, August 18, 2008

Market Sentiment

Dow 44 =2
Nasdaq -1 =-1
S&P 500 5=1
Ftse -43 =-1
Nikkei 63=1
Futures -8 =-1

Market Sentiment 1
Australian stocks are set for a volatile week ahead as investors digest a flurry of earnings reports and try to guess where interest rates are heading and the extent to which the global economy is slowing.

Friday, August 15, 2008

Market Sentiment

Dow 83 =4
Nasdaq 25 =1
S&P 500 7=1
Ftse 49 =1
Nikkei -66=-1
Futures 20 =1

Market Sentiment 7
US and European stocks finished stronger overnight, setting the scene from a positive day on the Australian share market.

Local financial firms look set to rise after their US counterparts pushed the Dow Jones index up in day of relatively thin trading.

But renewed falls in commodities prices look set to weigh on resource firms.

Thursday, August 14, 2008

Market Sentiment

Dow -109 =-4
Nasdaq -2 =-1
S&P 500 -4=-1
Ftse -86 =-1
Nikkei -281=-1
Futures -4 =-1

Market Sentiment -9
The Australian share market is expected to extend losses from the previous session at the open, after jitters continued to creep back into the US economy.

Wall Street ended the session lower as credit concerns again hampered bank shares, while rebounding oil prices and weak retail outlooks fuelled fears about further declines in consumer sentiment.

Resource stocks could help prevent a significant slide on the market, benefitting from stronger commodities prices. BHP Billiton gained 3 per cent in European trading, while Rio Tinto Ltd put on 2.7 per cent.

Wednesday, August 13, 2008

Market Sentiment

Dow -140 =-4
Nasdaq -16 =-1
S&P 500 -9=-1
Ftse -7 =-1
Nikkei -127=-1
Futures -33 =-1

Market Sentiment -9
The share market is expected to open sharply lower after another drop in oil prices failed to lift US stocks.

Wall Street was weighed down by renewed fears about the economy and more mortage-related losses, after the third largest US investment bank JPMorgan Chase & Co announced it had lost around $US1.5 billion since July.

It's the first session in the last seven where a drop in the price of oil hasn't produced a rise in US stocks.

Tuesday, August 12, 2008

Market Sentiment

Dow 48 =2
Nasdaq 26 =1
S&P 500 9=1
Ftse 53 =1
Nikkei 263=1
Futures 19 =1

Market Sentiment 7
The local share market is expected to marginally higher with modest gains posted on Wall Street likely to be offset by more declines in commodities prices weighing on resource firms.

In a day of low volume trading, US financials lost the majority of early gains as new figures released by the US Federal Reserve pointed to a defensive tightening of lending standards in the last three-months.

Resource firms are set to slide further as a stronger US dollar and a perceived weakening in global demand continue to pull back commodities prices.

Monday, August 11, 2008

Market Sentiment

Dow 303 =4
Nasdaq 58 =2
S&P 500 30=2
Ftse 12 =1
Nikkei 43=1
Futures 72 =1

Market Sentiment 11
The Australian stock market is expected to open the week stronger, after US stocks rebounded sharply on Friday.

Wall Street's rally followed a surge in the US dollar and a drop in oil prices, and came despite an announcement by mortgage giant Fannie Mae that it had sustained a quarterly loss of $US2.3 billion ($2.54 billion).

The decline in oil prices raised hopes that the economy might be able to shrug off inflationary threats and expand more easily

Friday, August 8, 2008

Market Sentiment

Dow -225 =-4
Nasdaq -23 =-1
S&P 500 -23=-2
Ftse -58 =-1
Nikkei -130=-1
Futures -58 =-1

Market Sentiment -10
The share market looks headed for a poor opening after US stocks ended almost 2 per cent down on renewed concerns for the state of the financial sector.

The fallout on Wall Street from $US5 billion second quarter loss from American Insurance Group is likely to spill over into shares in local financial firms.

Resource companies face an uphill battle with further slides in metals prices overnight. Although a decline in mining stocks could be tempered by the fact that metals fell on a stronger US dollar, rather than recent signs of slowing demand from China.

Thursday, August 7, 2008

Market Sentiment

Dow 40 =2
Nasdaq 29 =1
S&P 500 4=1
Ftse 32 =1
Nikkei 340=1
Futures 15 =1

Market Sentiment 7

The local share market is expected to hold yesterday's strong gains after a late Wall Street rally on fresh three-month lows in the price of oil and stronger sentiment in technology stocks.

Wednesday, August 6, 2008

Market Sentiment

Dow 332 =4
Nasdaq 64 =2
S&P 500 36=2
Ftse 134 =1
Nikkei -18=-1
Futures 88 =1

Market Sentiment 9
The sharemarket is expected to open significantly stronger following solid gains on Wall Street which continued after the US Federal Reserve kept interest rates at 2 per cent.

But weak commodity prices look set to drag again on local commodities, which pulled the benchmark index down 1.4 per cent in the previous session.

Tuesday, August 5, 2008

Market Sentiment

Dow -42 =-2
Nasdaq -25 =-1
S&P 500 -11=-1
Ftse -35 =-1
Nikkei -161=-1
Futures -44 =-1

Market Sentiment -7

The sharemarket is expected to open lower following varied trading on Wall Street that ultimately ended in the red.

The US market was down early on renewed fears of further losses in financials amid an extended housing slump. A $US4 slide in the price of oil gave Wall Street a brief reprieve, but the market still closed down.

Weakness in US financials is likely to drag down the local sector, with resource firms also set to slide on falling commodities prices. Local airlines could buck the trend as the falling price of oil brings welcome relief to fuel prices.

Monday, August 4, 2008

Market Sentiment

Dow -52 =-4
Nasdaq -16 =-2
S&P 500 -7=-1
Ftse -57 =-1
Nikkei -282=-1
Futures -38 =-1

Market Sentiment -10
The Australian stock market is expected to open lower on after a fall on Wall Street, but some companies will receive a boost from speculation of a rate cut by the Reserve Bank of Australia (RBA).

Miners may decline as metals including gold and copper slipped on Friday.

Friday, August 1, 2008

Market Sentiment

Dow -206 =-4
Nasdaq -4 =-1
S&P 500 -17=-2
Ftse -9 =-1
Nikkei 9=1
Futures -48 =-1

Market Sentiment -8
The Australian stock market is expected to fall about one per cent after Wall St was rocked by disappointing US economic growth and job market figures.