Trading based on the DOW

[akumaslair]

Hi everyone.

A bit of a newbie here.

now, i understand that the AUS market "basically" follows the DOW.

is there a way to trade on this????

ie nothing is guarnateed when it comes to investing, I know that but, for example, if you see all DOW drop a lot overnight, eg can you sell all your stock on open, and if the DOW rises a lot, can you buy as much as you can at open and assuming, that there is no other factors, get a much higher ROI for the day.

or am I just dreaming????

 

[professor_frink]

Hi, have a look at this post made by Trembling Hand a while ago on the XAO analysis thread-

https://www.aussiestockforums.com/forums/showpost.php?p=182287&postcount=670

 

[xtanda]

akumaslair,
Although it is true that usually ASX follows DOW, but most of the increase or decrease in ASX usually happened in opening. Hence unless you already in the market the day before usually you cannot profit from it too much.

Let say (just example): BHP in ASX closing at $40 yesterday and last night all DOW, S&P500 and NASDAQ down steeply, so we anticipate that ASX will normally down as well. So, we try to sell BHP at opening hoping that the price will be only slightly down.. Unfortunately, say that day BHP is closing at $39, the opening price would be probably $38.5 or even $39.5 already....

 

[akumaslair]

fair enough.. thats exactly what I though,,,, bascially its too late to react or everyone would be doing it... and I know that trading at opening can be make or break!!

 

[vishalt]

The Australian market has been pretty resilient lately and it I've found if the Dow is down heavily, the Aussie market opens down pretty hard but then manages to climb back up a bit still.

On the other hand the Dow can sometimes have an ok gain (say +50 points), the Aussie will open strongly and then reverse course and end sharply lower at times, meh its pretty unpredictable.