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, April 29, 2009

Market Sentiment

Dow -8 =-2
Nasdaq -6=-1
S&P 500 -2=-1
Ftse -71=-1
Nikkei -233 =-1
Futures 29 =2
Market Sentiment -4

Australian shares are expected to fall on Wednesday, with banking stocks likely to take a hit after Australia and New Zealand Banking Group Ltd reported worse-than-expected profit.

ANZ reported a 43 per cent drop in its first-half cash profit, hurt by a more than doubling of bad debt charges, and flagged a further rise in provisions in the second half.

A spread of deadly swine flu outbreak to more countries would keep investors on the edge.

The mood will also be cautious after US stocks fell on fresh worries that major Wall Street banks may need to raise more money, offsetting more reassuring economic data that suggested worst may be over.
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