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Great site Kenny.

Technical Analysis written in a straightforward way so that everyone understands.

There's only a small few who get it consistantly correct and you are certainly in that group. Chris

Thanks for putting this all together and sharing! BHW

Awesome Stuff! Kenny has shown time and time again the ability to show us direction in these markets. Khalsa

Kenny, I appreciate your insight and analysis. You make sense of what I can rarely see.

Thanks for sharing.

Took a gold short at 1240 just closed at 1203 :-)))))))))))))))))) ........ top call!!  Gekko

Stock Market Indexes

Stock Market Basics

What is a Stock Market Index

Stock Market Indexes  indices,
are a pool of stocks used as a way of measuring how a market or sector is performing overall. An index is just a virtual portfolio.

It is the same as your personal portfolio where some stocks within it will have dropped and others will have gained but what really matters is whether you made money today or not, what is the final number at the bottom of the page? Did the index go up or down today is what I want to know.    

Each stock index has its own formula for calculating its value so the actual number itself is not that important. It is simply a means of measuring relative performance.

Stock Market Indexes

Examples of the best known Stock market indexes are-

Dow Jones Industrial Average (djia), often simply called the Dow or Dow Jones
Standard and Poors 500 (spx) or just S&P500, sp500 etc...
Ftse 100 (ukx), NIKKEI, ASX, DAX etc...

What stocks go into an Index

Stockmarket indices can comprise of absolutely anything you want to put in to them and measure the performance of. The Dow Jones Industrial Average (DJIA) contains 30 of some of the largest companys in the US spread across a number of sectors from McDonalds to Microsoft.

The Standard and Poors S&P 500 is a much wider spread of stocks and contains ??.......yep you guessed it...500 stocks from across a variety of sectors. Sectors are just groups of similar companies. Retailers, Telecoms, Utilities etc.

Sectors, themselves can be measured in an index as a way of measuring how well that particular type of business is performing. We all know only too well that the Banking sectors took a nosedive through 2008.

Its not just stocks that are measured in market indexes. There are also indexes for commodities markets through to the Real Estate markets, If you can trade it, it will be in an index somewhere. There are even indexes of indexes.
Traders Trivia

Charles Dow created the oldest indexes that are still in use today, Dow Jones Transportation Average then the Dow Jones Industrial Average.  

Q. How many Dow Jones Indexes are there today?........and NO cheating!

Click to see the answer, it may surprise you -  Dow Jones stock market indexes


Why do we need Stock Indexes

Stock Indices are used extensively and have a wide variety of uses. The media love to quote the Dow and the Ftse changes on the day just  to let us know how well off or how poor we are, as the case may be.

An investor or investment manager can gauge how a particular sector or even a geographical area is performing relative to others. This gives them vital information for when they make decisions about where, and how much of his portfolio to allocate to it, if any. More about this in the how to trade section of this website.

Understanding stock index charts

Trading - Stock Indexes

Many traders trade the stock indexes themselves rather than the constituents within the index. Kennys favourite trades are the Standard and Poors 500 stock index (S&P500) and the FTSE100.

These indexes can be traded via ETFs, Futures and options or in some countries like here in the UK Financial Spread betting is an excellent alternative.

Stock Market Indexes Trading with Financial Spread Betting Explained

Return from Stock Market Indexes to Stock Market Basics

Free Stock Market
Trading Course

A Free 10 part stock market beginners trading course. This trading course offers an introduction to understanding how the financial markets work and how to trade successfully.

"Risk comes from not knowing  what you are doing"

--Warren Buffett--

Financial Spread Betting

Tax Free Trading in the UK*

What is spread betting (spread trading) and how does it work? Learn about the many advantages of financial spread betting and find out where you can spread bet.

Elliott Wave Theory

Learn how Elliott Wave analysis can improve your trading. Find out how to access a Free 10 part tutorial for learning about the basics of Elliott Wave analysis.

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