ASX vs. Dow Jones

[springhill]

A thought i have been pondering over the last couple of months. In my limited experience and observations it always seemed to me we followed the movements of the DJI with strict conformity.
As of late we seem to be bucking the leads that the US gives us overnight, both in trend and in strength.
Are we finally standing on our own 2 feet as an economy and an investing society? Realising the world revolves around more than the US? Seeing the value in our own evermore profitable companies? Seeing the value that our resources boom has and the flow on effect of it?
Seems to me the ASX is untying itself from the DJI and moving in its own direction, rather than being dictated to. Of course i could be wrong and there will be arguments for and against, but i would make an interesting discussion thread IMO

 

[s3081402]

Re: ASX vs Dow Jones

You are right. Every morning i check the DOW and if it down then the ASX is down as well. Mining is going well in Australia and this has nothing to do with the mortgage problem in the US but you still see some companies dropping away badly

 

[Trembling Hand]

Re: ASX vs Dow Jones

Nah. I reckon its is more 50/50 Some times we predict what is happening, some times we follow. Yesterday we went down right after the open then fell all day obviously in anticipation of falls right across the place Asia, Europe and US. If you simply traded off what the US did last night you would be cut up. Better to just play the price action in our market with half an eye on the States but just plainly following what happened last night will get you in trouble. Like today if you sold the open because the States went down you would now be in a lot of trouble as we have been going up all day.

 

[springhill]

Re: ASX vs Dow Jones

Nah. I reckon its is more 50/50 Some times we predict what is happening, some times we follow. Yesterday we went down right after the open then fell all day obviously in anticipation of falls right across the place Asia, Europe and US. If you simply traded off what the US did last night you would be cut up. Better to just play the price action in our market with half an eye on the States but just plainly following what happened last night will get you in trouble. Like today if you sold the open because the States went down you would now be in a lot of trouble as we have been going up all day.

So following up on that do u think it has always been 50/50? Have we always traded our own way with only one eye on the US or is this a recent development as our economy is now powering along?

 

[Trembling Hand]

Re: ASX vs Dow Jones

So following up on that do u think it has always been 50/50? Have we always traded our own way with only one eye on the US or is this a recent development as our economy is now powering along?

To some degree it is all linked. On a bigger scale there is times that we go our own way. Think of the under performance during the Dot Com run. Then we have lead the recent Bull run from 03 with the States only just catching up this year as we started to go nowhere in May. Predicting the recent meltdown?
I trade intraday and a hell of a lot of trades are fading the overnight action. I think the Aussie market is smart enough to go its own way once the opening action is out of the way. Today and yesterday are perfect examples of that.

 

[kitehigh]

Re: ASX vs Dow Jones

Like today if you sold the open because the States went down you would now be in a lot of trouble as we have been going up all day.

Which market were you following today?? Wasn't the market that I saw unfolding where it fell on open to slowly recover to be 9 points behind for the day.

 

[nizar]

Re: ASX vs Dow Jones

Somebody did a study on another board and found that the correlation overall between the US markets and the ASX is about 0.50.

BUT there is much higher correlation for 1%+ moves.

 

[>Apocalypto<]

Re: ASX vs Dow Jones

Which market were you following today?? Wasn't the market that I saw unfolding where it fell on open to slowly recover to be 9 points behind for the day.

Read that carefully if u sold the open the main stress.

I know what th is talking about, as I sold short the xjo last night and if I had not taken profits when I did just after open I would have ended up in a mess.

 

[wayneL]

Re: ASX vs Dow Jones

Like today if you sold the open because the States went down you would now be in a lot of trouble as we have been going up all day.

Which market were you following today?? Wasn't the market that I saw unfolding where it fell on open to slowly recover to be 9 points behind for the day.

Kite,

You need to familiarize yourself with how cash indexes & index futures work.

The cash index appeared to fell on open is an illusion. The market gapped lower, but because of the way the index is computed, and the staggered openings, it looked like it was falling. The truth is it had already fallen (via the matching of bids and asks in opening auction process) BEFORE the open.

TH's version is the accurate one.

 

[CFD]

Re: ASX vs Dow Jones

I'd like to suggest that the great the % change in the DOW overnight the greater the likelyhood that we will follow.

 

[LifeChoices]

Why is the all ordinaries doing so much worse than the dow jones this year?

I think it's unfair and want to sue someone. Is this all to do with QE?