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, September 21, 2010

Market Sentiment

Dow 146 = 4
Nasdaq 40 = 2
S&P 500 17 = 2
Ftse 94 = 1
Nikkei 117 =1
Futures 42 = 2
Market Sentiment 12

The U.S S&P 500 closed at a four-month high on Monday as a long-awaited break above a technical range and a flurry of positive corporate news increased investor optimism.

The break came a day before a Federal Reserve meeting in which the central bank is expected to renew a promise to keep its portfolio from shrinking but is not seen taking new steps to ease monetary policy.

The S&P 500 has struggled to make a sustained move above 1,130, which has been the upper end of a range that has persisted since June. Monday's gains could be a shot in the arm if it sways institutional investors that September's rally of 8.9 percent by the benchmark S&P index has further to go.
Posted by at

No comments:

Post a Comment

Subscribe to: Post Comments (Atom)