What gives the Dow +US Markets its Direction?

B

Bullz n Bearz

Okay, this question I'm asking is much different than any other question I have asked. I think the core answer to this question may solve a lot of problems and confusions in the investment industry.

As T-Bills follow the Dow or Dow follows T-Bills.. In the big picture, what core thing do these standard markets follow on a daily basis? I don't believe fear , joy, etc. is the reason. If that is the case the markets would be extremely unpredictable..

Maybe there are some key economic reasons behind the markets trail up? Lots of consumer spending + downright strong economy is what keeps the markets in it's overall upward direction?


Cmon guys, let's get some scholary thought here. No joo joo bean stuff!
 
The DOW isnt too hard to figure out. You have 30 well known stocks...just look at the individual stocks and you can pretty much tell the reasoning behind the trail up and the trail down.

Quite a few recent earnings calls that simply went wrong.

On a macro level, of course, you have the EURO, interest rates and energy prices that place pressure on these companies.

The key to the dow is to study the individual stocks which are not difficult to figure out.

My biggest surprise was Caterpillar so far...
 
Quote from michaelscott:

The DOW isnt too hard to figure out. You have 30 well known stocks...just look at the individual stocks and you can pretty much tell the reasoning behind the trail up and the trail down.

Quite a few recent earnings calls that simply went wrong.

On a macro level, of course, you have the EURO, interest rates and energy prices that place pressure on these companies.

The key to the dow is to study the individual stocks which are not difficult to figure out.

My biggest surprise was Caterpillar so far...
More...

So it sounds like you use a more micro approach and try to identify each stock in the dow and see how the earnings are for it + prepare for any other news (good or bad) that may hit them..

on a macro level, the euro , interest rates and energy prices place pressure on the dow's 30 but in what way? could you just specificy that a little bit more..

although i do like your approach to the the dow's movement.. earnings seems like it plays a big role..

however, this movement seems more "immediate picture" i'm looking for more "overall picture".
 


Cmon guys, let's get some scholary thought here. No joo joo bean stuff! [/B]
More...


Andrew's pitchfork in the 60 minute charts, also on the NQ and ES.

One of the biggest realizations I've had throughout my trading career.

In the end, trading is so hard, because it is so easy after all.
 
Quote from pr€dator:

Andrew's pitchfork in the 60 minute charts, also on the NQ and ES.

One of the biggest realizations I've had throughout my trading career.

In the end, trading is so hard, because it is so easy after all.
More...

c0uld you tell us more about your realization with it.. how do you like to place it on your charts?
 
Quote from Bullz n Bearz:

c0uld you tell us more about your realization with it.. how do you like to place it on your charts?
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We. You mean, how do we Andrew's pitchfork traders like to place it on our charts.

Find it out and you're part of the club :)
 
Quote from Bullz n Bearz:

Okay, this question I'm asking is much different than any other question I have asked. I think the core answer to this question may solve a lot of problems and confusions in the investment industry.

As T-Bills follow the Dow or Dow follows T-Bills.. In the big picture, what core thing do these standard markets follow on a daily basis? I don't believe fear , joy, etc. is the reason. If that is the case the markets would be extremely unpredictable..

Maybe there are some key economic reasons behind the markets trail up? Lots of consumer spending + downright strong economy is what keeps the markets in it's overall upward direction?


Cmon guys, let's get some scholary thought here. No joo joo bean stuff!
More...


when the fed is inflating the money supply, the market goes up

when the fed shuts it off, it goes down

there can be a lag between fed change and market direction change, but it's pretty much when, not if
 
Earnings (and the growth of said earnings) *can be* one of the key components behind price action.

So with that said...all of the DOW components are multi-national companies and they deal in many different currencies. Although they deal in different currencies, they report their earnings in dollars. Therefore, compare the US Dollar index to the DOW and you see a pattern forming.

The price of energy also cuts into the DOW components earnings for obvious reasons. Higher energy means increased costs and therefore less profit. Look at the $WTIC chart and compare it to the DOW.

Interest rates effect small caps more then they do large caps, however, they still play a role in effecting earnings. Compare the $TNX to the DOW price action.

So those three factors can cut into earnings which *can be* a key component to price.

Quote from Bullz n Bearz:

So it sounds like you use a more micro approach and try to identify each stock in the dow and see how the earnings are for it + prepare for any other news (good or bad) that may hit them..

on a macro level, the euro , interest rates and energy prices place pressure on the dow's 30 but in what way? could you just specificy that a little bit more..

although i do like your approach to the the dow's movement.. earnings seems like it plays a big role..

however, this movement seems more "immediate picture" i'm looking for more "overall picture".
More...
 
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