A person who invest or trades the US stock market would need to look at 3 important stock index everyday. They are:
When financial news refer to the stock market they actually mean the S&P 500 or the Dow Jones. The S&P 500 index represents the 500 biggest and most profitable companies in the world. The Dow Jones represent the 30 biggest companies that act as a bell weather to the US economy. The Nasdaq represents the technology stocks in the market. Together they are known as the general market.
The main reason why you should follow the general market is because at least 75% of the stocks in the market follow the direction of these 3 indexes.
Periods of rising stock market usually coincides with the biggest bull run in stocks.
In the chart above, you can see that the S&P 500 Index rose from November to December 2016. This was just after the Presidential Election and the market rose dramatically after the uncertainty of an election. JP Morgan, a bank stock rose from $68 to $88 in that short period of time.
Since most stocks move in tandem with the general markets, you should pay attention to the major indexes. Some things to note are:
If you can answer these questions you will be able to position yourself for some of the biggest move in a stock.
Dec 03, 18 08:16 AM
With an agreement to pause the trade war, Dow is about to jump 450 points higher, but will this rally sustain and go even higher? Lets take a look at the charts.
Nov 29, 18 07:51 AM
Yesterday we saw a huge big rally 600 ++ points. The question now is this rally sustainable and will we have a beautiful Christmas in the stock market this year. Here are a few things to look out for…
Nov 29, 18 07:35 AM
This sideways movement in the KLCI is really giving investors and traders a headache. What we are experiencing now is a volatility contraction which is often followed by volatility expansion.
Nov 26, 18 08:52 AM
As the techs reach an area of long term support, its going to be a choppy ride as the market decides whether support will hold or the downtrend continues...
Oct 30, 18 06:35 AM
As we close out the month of October 2018, what is in store for us? Let us take a look at the charts and see what they might be telling us.