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.


Monday, September 27, 2010

Market Sentiment

Dow 198 = 4
Nasdaq 54 = 2
S&P 500 24 = 2
Ftse 51 = 1
Nikkei -94=-1
Futures 57 = 4
Market Sentiment 12
Public Holiday Western Australia only ASX will trade normal hours.

Australian shares are set for a strong start to the week after Wall Street hit its highest point in four months on Friday.

New York's Dow Jones index closed the week nearly two per cent higher as economic data continued to show the prospect of a double dip recession in the world's largest economy is weakening.

Figures showed orders for big-ticket items decreased in August at a slower than expected rate, and traders found comfort in the fact that orders of items such as household appliances rose by a more-than-expected two per cent.

The manufacturing industry is seen as one of the main engines pulling the US economy out of one of its worst recessions in decades.
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