Think Financial Markets - Excellence In Trading Financial Markets: February 2013

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.

Thursday, February 28, 2013

Market Sentiment

Dow 175 = 4

Nasdaq 33 = 2

S and P 500 19 = 2

Ftse 55 = 1

Nikkei -145 = -1

Futures 44 = 2

Market Sentiment 10

Local stocks look to open with a significant spring in their step, as offshore indexes continued to lap up Bernanke's dovish approach to the Fed's stimulus efforts.

Wednesday, February 27, 2013

Market Sentiment

Dow 116 = 4

Nasdaq 13 = 1

S and P 500 9 = 1

Ftse -85 = -1

Nikkei -264 = -1

Futures 21 = 2

Market Sentiment 6

Local stocks hope to recover somewhat after yesterday's savage sell-off globally, as Bernanke sooths markets at congressional testimony. At the University of Adelaide RBA Assistant Governor Guy Debelle said the central bank was prepared to cut interest rates to offset the impact of a stubbornly high dollar.

Tuesday, February 26, 2013

Market Sentiment

Dow -216 = -4

Nasdaq -46 = -2

S and P 500 -28 = -2

Ftse 20 = 1

Nikkei 277 = 1

Futures -38 = - 2

Market Sentiment -8

Local stocks look to open significantly lower as uncertainly over the Italian election results weighed heavily on international markets. Chinese PMI data released yesterday was interpreted as fairly modest and was brushed off by investors.

Monday, February 25, 2013

Market Sentiment

Dow 120 = 4

Nasdaq 30 = 2

S and P 500 13 = 1

Ftse 44 = 1

Nikkei 77 = 1

Futures 21 = 2

Market Sentiment 11

Local stocks look to open higher following a positive end to the week in US and Europe. Plenty of locale news for investors to digest as QBE, Whitehaven, Virgin, Flight Centre, Harvey Norman and Woolworths will report earnings today

Friday, February 22, 2013

Market Sentiment

Dow -47 = -2

Nasdaq -33 = -2

S and P 500 -10 = -1

Ftse -104 = -1

Nikkei -159 = -1

Futures -12 = -2

Market Sentiment -9

Local investors will be hesitant as weak offshore leads and disappointing data stemming from Europe put a real anchor on sentiment. Despite this, a few good results from such heavyweights as STO and CWN can potentially yield gains for a market which has seen multi-year highs in the past week.

Thursday, February 21, 2013

Market Sentiment

Dow -108 = -4

Nasdaq -49 = -2

S and P 500 -19 = -2

Ftse 16 = 1

Nikkei 96 = 1

Futures -23 = -2

Market Sentiment -8

Australian equities are looking for a timid start as weak offshore leads pressure the open. However, much of the day's movement will be sourced from the raft of earnings releases with big guns as QAN, ORG, AMP and EGP set to report to the market today.

Wednesday, February 20, 2013

Market Sentiment

Dow 54 = 4

Nasdaq 22 = 1

S&P 500 11 = 1

Ftse 61 = 1

Nikkei -36 = -1

Futures 13 = 2

Market Sentiment 8

Local stocks look to open higher, following positive results offshore. A few big names have first half earnings releases today, including BHP, Fortescue, Suncorp, Toll and SEEK.

Tuesday, February 19, 2013

Market Sentiment

Dow holiday

Nasdaq holiday

S&P 500 holiday

Ftse -10 = - 1

Nikkei 234 = 1

Futures -4 = - 2

Market Sentiment -1

Local stocks look to take an early pause after Monday's strong start to the week. Major earning releases today include Coca-Cola Amatil's full year results as well as the half year results for Arrium and Asciano.

Monday, February 18, 2013

Market Sentiment

Dow 8 = 2

Nasdaq -7 = - 1

S&P 500 -2 = - 1

Ftse 1 = 1

Nikkei -133 = -1

Futures 13 = 2

Market Sentiment 2

Local stocks look to open higher, disregarding offshore results, as investors focus on upcoming releases from earnings season. Major reports out today include BlueScope Steel, Lend Lease Corp and Bendigo and Adelaide Bank.

Friday, February 15, 2013

Market Sentiment

Dow -10 = -2

Nasdaq 2 = 1

S&P 500 1 = 1

Ftse -32 = -1

Nikkei 56 = 1

Futures -7 = -2

Market Sentiment -2

Local stocks look to follow offshore markets and open relatively flat after edging further away from the psychological 5,000 mark yesterday.

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