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Chapter 28 Part III. Continuation - Stock Market. Page 4

Discussion in 'Complete Trading Education- Forex Military School' started by Sive Morten, Dec 27, 2013.

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  1. Sive Morten

    Sive Morten Special Consultant to the FPA

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    Commander in Pips: I see you’re big expert on divergences… Still, you will take a look at USD/JPY you’ll see that Yen highly appreciated compares to USD, although US market looks stronger, right?

    Pipruit: In other words, it’s not so obvious. We need to know underlying factors of any growth or fall.​


    Commander in Pips: Right. Here is another example. I guess that everything is good in Switzerland, right? Then comment this:


    Chart #2 | S&P 500 and Swiss Stock Index, monthly
    [​IMG]

    Pipruit: The final stage also shows a divergence and looks more like Nikkei index, but I do not remember any water flow in Switzerland. Besides, CHF shows outstanding appreciation to USD and EUR, so that SNB had to launch intervention and hold EUR/CHF at 1.20…​


    Commander in Pips: Right. So, applying the stock market to the forex trading is not a piece of cake.


    Pipruit: Sir, and could you please specify some world major indexes?​

    Major World Indexes

    Commander in Pips: Sure. In fact any index is a weighted average of its components (stocks), but each averaging method could be different:

    There are three major US Indexes:

    1. Dow Jones Industrial Average (DJIA), aka jus Dow, that includes the value of 30 of the largest and most influential and representative companies. Their value allows us to judge about the overall US stock market. This index is more popular among media and population. Dow is price-weighted index. It means that the weight of each particular company in index depends from the price of equity, but not from total capitalization of company, as in S&P 500;
     
    #1 Sive Morten, Dec 27, 2013
    Lasted edited by : Oct 8, 2016
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