Does the ASX 200 mimic the DOW JONES and NASDAQ?

[jaithomson]

Hi all,

I'm very new to trading the ASX 200 via IG Markets. I have been comparing the ASX 200's daily performance against the previous close on the DOW JONES and NASDAQ on the NYSE. It seems to mimic it ( a case of 'they sneeze, we catch a cold') - would this be a fair analysis..?

Any thoughts or tips on this would be most appreciated.

Thanks.

 

[wayneL]

Re: Does the ASX 200 mimic the DOW JONES and NASDAQ...?

Draw your own conclusions:

http://finance.yahoo.com/echarts?s=^AXJO#chart7:symbol=^axjo;range=my;compare=^dji+^ixic+^gspc;indicator=volume;charttype=line;crosshair=on;ohlcvalues=0;logscale=on;source=undefined

 

[korrupt_1]

Indices track each other in real time 24hrs/5 days a week... FTSE, NIKkEI, SHANGHAI, DOW JONES, etc, etc...

To say that you "saw the DJ tanked overnight" will not give you an advantage what-so-ever(*) on trading the ASX200 the next day. The ASX200 would have already dropped on the open and it's a case of "too late, you missed the boat"

Generally,... the Dow Jones is by far the most influencial index globally. I find that if you want to trade the ASX200... read up on the health of the US enconomy.

(*) There are few strategies that you could use... one is the 'fade' in which you do the opposite to what the Dow did, however, this strategy hasn't been so successful lately in this bear market. During the bull-market you could almost bet your house that if the Dow tanked 100-200pts the night before, the ASX200 would rally, and vice versa.

 

[jaithomson]

Thanks for your input guys - much appreciated.

 

[aacantona]

There is about a 60-70% day-to-day correlation in direction.