Think Financial Markets - Excellence In Trading Financial Markets: December 2011

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, December 30, 2011

Market Sentiment

Dow 136 = 4

Nasdaq 24 = 2

S&P 500 13 = 2

Ftse 59 = 1

Nikkei -25 = -1

Futures 37 = 2

Market Sentiment 10

The Australian share market is expected to open higher after a relatively successful auction of Italian bonds improved market sentiment overnight.

Thursday, December 29, 2011

Market Sentiment

Dow -139 = -4

Nasdaq -32 = -2

S&P 500 -16 = -2

Ftse -5 = - 1

Nikkei -17 = -1

Futures -33 = -2

Market Sentiment -12

The Australian share market is expected to open lower, as further worries about the eurozone government debt crisis pushed overseas markets lower overnight.

Wednesday, December 28, 2011

Market Sentiment

Dow 124 = 4

Nasdaq 19 = 1

S&P 500 11 = 1

Ftse 56 = 1

Nikkei HOL

Futures 48 = 2

Market Sentiment 9

Retail stocks are expected to be in the spotlight when Australian equity markets reopen on Wednesday as investors assess how much shoppers spent during the Christmas sales period.

Friday, December 23, 2011

Market Sentiment

Dow 62 = 4

Nasdaq 21 = 1

S&P 500 10 = 1

Ftse 67 = 1

Nikkei -65 = - 1

Futures 37 = 2

Market Sentiment 8

The Australian sharemarket is expected to open higher after the release of some encouraging US employment data.

Data overnight showed another improvement in the US job market as unemployment claims continued to fall but third quarter growth was revised down to 1.8 per cent from two per cent.

Thursday, December 22, 2011

Market Sentiment

Dow 4 = 2

Nasdaq -26 = -1

S&P 500 2 = 1

Ftse -30 = -1

Nikkei 124 = 1

Futures -4 = -2

Market Sentiment 0

The Australian sharemarket is expected to open lower as initial gains made by overseas markets on the news of a massive bank liquidity injection by the European Central Bank (ECB) faded because of unease at the huge amount offered.

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