Following the Dow

[The Owls]

I am quite often confused with the ups and downs on the stock market. When the Dow drops the ASX drops but quite often when the DOW goes up our shares quite often don’t rise the same percentage. Today is a typical example, The ASX has not operated since 1/4/2010 and the DOW has risen a total of 121.01 points. With this rise and all the good news from Europe and the US I thought we would have a day of increase but alas the major bank except the NAB are trading RED. I just don’t understand.

 

[bootross]

It can be a common misconception that the ASX will blindly follow the DOW. This is why trading strategies such as making buy or sell decisions on the ASX based on what the DOW did the previous night often fail. The ASX is it's own market and should be treated as such. Just the same as not every stock on the ASX follows the general index movement or it's own sector index.

Whilst at times I have seen the ASX not increase as much as the DOW did on a previous night (as you alluded to), I have also seen times when our market did not drop as much as the DOW did overnight, or after a big move down in the morning, support is quickly found and what started to look like a crappy day ends up being square or sometimes a bit above yesterday's close.

As far as news affecting market movements, at times it can but most times the market has already priced in good or bad news and that's why news often has little effect on the following day's movements. Very often 'news' is used to explain why the market did this or that, ie it's used in hindsight, especially by market reporting services and programs.

 

[Julia]

I am quite often confused with the ups and downs on the stock market. When the Dow drops the ASX drops but quite often when the DOW goes up our shares quite often don’t rise the same percentage. Today is a typical example, The ASX has not operated since 1/4/2010 and the DOW has risen a total of 121.01 points. With this rise and all the good news from Europe and the US I thought we would have a day of increase but alas the major bank except the NAB are trading RED. I just don’t understand.

Our market is up 46 points. Proportionately that's not far below the Dow's 120 rise.
Don't judge the ASX just by financial stocks, though contrary to what you observe this morning, I have CBA and WBC which are both up quite well as I write.

Today's rise is led by the miners for obvious reasons.

 

[nomore4s]

You probably need to look at it like this - By the time the markets here open what the DOW did last night is old news and is most likely already factored in by the open.

Markets are generally forward looking, so what the DOW did last night has little effect on the market moving forward.

Simplistic view but.................

 

[SilverRanger]

Don't forget we have our interest rate hike today, any upside today will be pretty much capped by this

 

[The Owls]

Markets are generally forward looking, so what the DOW did last night has little effect on the market moving forward.

Simplistic view but.................

To keep the thread going if the quote above is correct then what are the reasons for our ASX opening approx the same % the DOW dropped last night. Please accept this post as general discussion and not criticisms.

 

[nomore4s]

To keep the thread going if the quote above is correct then what are the reasons for our ASX opening approx the same % the DOW dropped last night. Please accept this post as general discussion and not criticisms.

But it will have little or no effect on where we close. While the DOW and a range of other influences that happened last night might affect our open (this is what I meant by factored into our open), it does not always tell us how or if it will effect our close or how the day will play out.

 

[The Owls]

I am quite often confused with the ups and downs on the stock market. When the Dow drops the ASX drops but quite often when the DOW goes up our shares quite often don’t rise the same percentage. Today is a typical example, The ASX has not operated since 1/4/2010 and the DOW has risen a total of 121.01 points. With this rise and all the good news from Europe and the US I thought we would have a day of increase but alas the major bank except the NAB are trading RED. I just don’t understand.

Dow goes down last Friday 1.13% and the ASX200 down 1.5%.It would appear that the major traders on the ASX dont have any guts or courage. They run and sell when things have a down turn. I feel the major traders pray for bad news from the US............

 

[Trembling Hand]

Dow goes down last Friday 1.13% and the ASX200 down 1.5%.It would appear that the major traders on the ASX dont have any guts or courage. They run and sell when things have a down turn. I feel the major traders pray for bad news from the US............

This is the problem with people whose research doesn't extend past what the dow did last week.

China is getting smashed on property loan curbs today, Oil is taking a hammering due to probably the airline industry being closed down. The Yens running to the moon due to the carry trade unwind, Korea, Taiwan and Japan are down more than 2%. Europe futs look awful, industrial metal futs are down another 1 or more % from NY close and AUD is making new recent lows.


CONTEXT

 

[SmellyTerror]

If we follow the DOW:

"Shares opened higher on a strong US lead"

"Shares lower on weak US data"

If we don't:

"Shares today fell despite strong Dow"

"Shares shrugged off a poor US lead to end higher"

There, now you're a finance journalist.

---
PS: Ha. From two recent days, news.com.au:

"Shares open higher after mixed US lead"

"Shares open lower on mixed Wall St finish"

Might as well have the headline: Shares do something - and also, hey look! A cute puppy!

 

[Broadway]

Dow price wont predict asia/xao.

Dow volume can.

 

[baby_swallow]

If we follow the DOW:

"Shares opened higher on a strong US lead"

"Shares lower on weak US data"

If we don't:

"Shares today fell despite strong Dow"

"Shares shrugged off a poor US lead to end higher"

There, now you're a finance journalist.

---
PS: Ha. From two recent days, news.com.au:

"Shares open higher after mixed US lead"

"Shares open lower on mixed Wall St finish"

Might as well have the headline: Shares do something - and also, hey look! A cute puppy!

Very true.
You can almost create a mechanical system that bet against the finance journalists and make money!

 

[noirua]

The Dow Jones has plummeted at premarket registering a fall of 191 on jobs data: http://money.cnn.com/data/premarket

 

[springhill]

The Dow Jones has plummeted at premarket registering a fall of 191 on jobs data: http://money.cnn.com/data/premarket

Another buy with open arms opportunity noirua? Not a criticism, ive followed that thread keenly and look for accumulation opps on dips

 

[noirua]

Another buy with open arms opportunity noirua? Not a criticism, ive followed that thread keenly and look for accumulation opps on dips

Ah yes springhill, 'not all criticisms are adverse'. Without giving stock names away my major purchases in Aus was involved with sugar and the other in enhancing SA sub-bituminous coal and the rest have interests near Argentina.
As I mentioned elsewhere it's more 'mouth open like a whale' [yes, it hasn't got arms I know] It filters well as we must when investing or we'll choke on it - good luck with the dips - a big one coming up.

 

[Garpal Gumnut]

I fear the DOW is a Dead Parrot.

Last one holding any stock in October will have found the Holy Grail.

gg

 

[noirua]

I fear the DOW is a Dead Parrot.
Last one holding any stock in October will have found the Holy Grail.
gg

Fear thee not gg as the US$ has found its niche and its strength will help cushion falls across the pond.

 

[nunthewiser]

just a query not meant as an attack.


Why wont you mention the stock codes that you bought? easier to pick them after? or you dont wanna sway anyones thinking?

Just wondering as other ppl here will say what they bought so others can have a squiz at trade possibilities also once the trade has been entered or bypassed.

Its a learning tool trying to work out your own view compared to others on stocks that we may follow/trade also.

 

[noirua]

just a query not meant as an attack.


Why wont you mention the stock codes that you bought? easier to pick them after? or you dont wanna sway anyones thinking?

Just wondering as other ppl here will say what they bought so others can have a squiz at trade possibilities also once the trade has been entered or bypassed.

Its a learning tool trying to work out your own view compared to others on stocks that we may follow/trade also.

Hi there, I thought when I mentioned sugar everyone would have latched on to the stock. Near Argentina is good-enough to guess the sector. Enhanced coal made into briquettes in SA, a bit more difficult, if I mention Phillipson that should do the trick - good luck

 

[nunthewiser]

Hi there, I thought when I mentioned sugar everyone would have latched on to the stock. Near Argentina is good-enough to guess the sector. Enhanced coal made into briquettes in SA, a bit more difficult, if I mention Phillipson that should do the trick - good luck

lol

i should of posted this in your "buy with broken arms" thread but i saw u mention buys here too.

was a simple question which hasnt been answered so i,ll form my own conclusion and go on my way.