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.


Tuesday, August 17, 2010

Market Sentiment

Dow -1=-2
Nasdaq 8=1
S&P 500 1 =1
Ftse 1=1
Nikkei -57=-1
Futures -5=-2
Market Sentiment -2


The Australian sharemarket has received mixed leads from overnight trade offshore. Wall Street indices were flat to marginally higher, whilst metals were higher, but oil was slightly lower.

In economic news, the Reserve Bank of Australia (RBA) publishes the minutes of its board meeting on August 3, and RBA governor Glenn Stevens delivers the 2010 Shann Memorial Lecture in Perth.

In data releases, the Australian Chamber of Commerce and Industry releases its small business survey for the June quarter, and the Melbourne Institute issues its Wages Report for the August quarter.


In equities, more companies deliver financial results. Annual results are expected from Commonwealth Property Office Trust, CFS Retail Property Trust, OneSteel Ltd, UGL Ltd, SAI Global Ltd, Primary Health Care Ltd, Challenger Wine Trust, GWA International Ltd and Sky City Entertainment Group Ltd.

Aston Resources Ltd and Bailey Minerals NL are due to list on the Australian stock exchange, and Minara Resources holds its annual general meeting.
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