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NDX Crash Last ReminderThis is the last of all 3 major US indexes that we are tracking... Let's see what the chart has to say. We've been following the correction that started a few weeks back. Looks like bearish momentum can start to pick up. We can see that lasts weeks candle closed below EMA50 and this week we have red. With a bearish RSI, trending lower and lower and the MACD going below zero, it is only a matter of time before the next support level is tested. You can check my previous trade ideas on this index for all the details, the support levels, the chart signals & more. 7-Feb. 28-Jan. 26-Jan. 19-Jan. Leave a comment and please choose to follow my work. Your support is always appreciated. Namaste.
NASDAQ:NDXShort
by AlanSantana
7
Indexes - What are they and how do they work?Index tracks performance of multiple assets that are grouped together. One of the first people to introduce the concept of indexing were Charles Dow and Edward Jones when they created the Dow Jones index in 1896. This concept allows for an easy tracking of performance of any particular sector within the economy. For example, the Nasdaq 100 index tracks performance of hundred biggest tech companies in the U.S.; similarly, the Russell 3000 index tracks three thousand largest companies in the United States. These indexes contain U.S. securities which account for over 90% of U.S. corporate equity; therefore, analyzing an index provides an investor with information about the overall health of the economy or particular sector. Diversification Generally, investing in indexes is associated with lower risk than investing in stocks. This is because indexes are structured in such a way that they diversify risk by tracking performance of multiple assets rather than by tracking performance of one single asset. For example, if an investor's portfolio consists of shares of a single stock company and the value of those shares drops, then it directly affects the portfolio in a negative way. However, if an investor owns an index tracking performance of 10 companies instead of a one stock title, then the investor's risk is diversified among ten companies instead of one single company. Therefore, an index tends to perform well as long as the majority of its components perform well. Similarly, when the majority of companies incorporated within an index perform poorly then the index tends to reflect it. Illustration 1.01 Illustration above depicts the monthly chart of Hang Seng Index (Ticker: HSI). It is observable that the index performed well in the long-term. Though, massive drops in the index are observable too in 1997, 2000, 2007, 2015 and 2018. Source: www.tradingview.com Value of the index and weight distribution The value of an index is dependent on its underlying holdings; further, it can be based on the price, market-cap or any other metric related to these assets. There are various methods on how to weight an index which plays an important role in how it performs. For example, in an unweighted index all its components have equal significance, regardless of their size. However, in a market-cap weighted index these components hold significance that is proportional to the size of their market-cap. Therefore, a volatile move in a big company would have a bigger impact on the overall performance of an index as opposed to the volatile move in a small company. Most indexes are price-weighted and market-cap weighted. Indexes as financial assets Generally, indexes tend to move in trends and produce good results over a long-term period. Index investing is preferable for inexperienced and passive investors because it tends to outperform active management in the long run. Additionally, it takes off psychological pressure that is associated with an actively managed portfolio while providing more free time to an investor. Exposure to an index can be gained by investing in index futures, options, CFDs, ETFs and other derivatives. Major indexes include: Dow Jones Industrial Average - thirty large U.S. companies that trade on the NYSE and NASDAQ. Nasdaq 100 - hundred biggest tech U.S. companies that are publicly traded. Standard & Poor 500 - five hundred biggest companies in the U.S. that are publicly traded. Russell 2000 - two thousand smaller companies that comprise the Russel 3000 index. Russell 3000 - three thousand biggest companies in the U.S. that are publicly traded. DAX 40 - forty biggest German companies that trade on the Frankfurt Exchange. Hang Seng Index - sixty biggest companies that trade on the Hong Kong Exchange. Seasonality and trends Indexes tend to move in cyclical trends and less often in trading ranges. They are less prone to the effects of calendar and industrial seasonality when compared to stocks and commodities. Change in components Since their inception many indexes have changed the composition of their underlying assets. For example, the Dow Jones Industrial Index started as Dow Jones Transportation Average in 1896 and consisted of only twelve companies. These companies operated mainly in railroads, cotton, tobacco, gas and oil sectors. However, eventually new companies were added to the index until it reached the total number of thirty companies in 1928. Since then the composition of the index changed several times; although, the number of companies stayed the same. This concept of rebalancing indexes is common to many other indexes; and it usually occurs on a quarterly basis. Illustration 1.02 Picture above shows the monthly chart of the Nasdaq 100 Index (Ticker: NDX) between 1995 and 2006. Companies included in this index changed over time. Nowadays, the Nasdaq 100 index includes such companies as Alphabet, Apple, Microsoft, Intel, Tesla, etc. Source: www.tradingview.com If you have not read our previous articles on stocks and commodities, please feel welcome to do so. They are attached to this idea. Additionally, feel free to express your own thoughts and ideas in the comment section below. DISCLAIMER: This analysis is not intended to encourage any buying or selling of any particular securities. Furthermore, it should not serve as a basis for taking any trade action by an individual investor. Your own due diligence is highly advised before entering trade.
Editors' picks
SP:SPXEducation
by Tradersweekly
43
DJIA Is Rebounding from The Lower Boundary of The Upward ChannelThe DJIA has been moving in an upward channel since around mid-June 2021. Recently the index formed a long bullish hammer candle that successfully confirmed a significant support area of a rising window/gap at 33,175 (this is called the cluster of candles). All the last week candles closed over the lower boundary of the rising channel and the 0.236 Fibonacci retracement level at 34060 as well as the 251-day EMA. In addition to this, there is a bullish divergence signal from the Williams %R out of the oversold zone. Therefore, the index is moving to test the levels at 35063, 35513 and 36152. In contrast, declining below the levels at 34060 and 33160 should indicate a further bearish move ahead.
TVC:DJI
by MohammedEl-Sherbiny
The Dow Jones Industrial Average: Not All RedThis is the last (DJI) of the three major indexes (SPX, NDX, DJI) we track for the United States. The Dow Jones Industrial Average (DJI) is also bearish on the daily, weekly and monthly timeframes... But we have something going on in the weekly chart. DJI Weekly (W): - As you can see, we have a Doji with high volume on this weekly candle. Prices remain above EMA50. Now, this can be considered good and can lead to a reversal but confirmation is needed first. For a bullish reversal, the weekly candle most close GREEN/Strong/Above EMA50 for the door to higher prices to open. The MACD and other indicators are strongly bearish though: Even though we have this signal, when we look at the Daily and Monthly timeframes we can see that the bears are still on top. We also have the same situation on the monthly timeframe as we saw with the S&P 500 Index (SPX). It is just moving and closing below EMA10 for the first time since February 2020... What follows we will know soon. Be aware! Be prepared! This can turn into something massive, this huge "crash/correction", but we are all coming out of it bigger, better and stronger that's for sure! Namaste.
DJ:DJIShort
by AlanSantana
2
S&P500 Index (SPY) Classic Bullish Accumulation Pattern 📈 Hey traders, S&P500 is trading in a global bullish trend. However, since November the market is consolidating. The price sets equal highs around 4750 structure. At the same time, the index sets higher lows indicating a bullish accumulation. Your plan is to patiently wait for a bullish breakout of the underlined blue structure and then buy on a retest. Your goal will be based on a major rising trend line that the price is respecting since May. ❤️Please, support this idea with like and comment!❤️
FX:SPX500Long
by VasilyTrader
11
MarketBreakdown | NZDUSD, USDCHF, S&P500, CADJPY Hey traders, here is a brief technical outlook of 4 peculiar instruments in my watch list: 1️⃣ NZDUSD - Weekly time frame 🇳🇿🇺🇸 The pair has recently broken and closed below a key weekly level. Bias remains bearish and a further decline is expected. Consider intraday time frames for occasional short entries. 2️⃣ USDCHF - Weekly time frame 🇺🇸🇨🇭 The market is trading in a global bearish trend. Currently, the pair is in a correction cycle: the price is steadily recovering within a bearish flag pattern. To catch the next bearish wave, wait for a bearish breakout of its support. You need at least a weekly candle close below that to confirm the breakout. 3️⃣ S&P500 Index - Daily time frame 📈 Again the market is approaching the all-time's structure high. I will expect a bullish breakout and bullish trend continuation. 4️⃣ CADJPY - Daily time frame 🇨🇦🇯🇵 The pair is trading in a global bullish trend. Reaching 93.0 level the market retraced. The market is currently falling within an expanding wedge pattern. To catch the next swing up wait for its bullish violation. You will need at least a daily candle close above its resistance to confirm the breakout. ❤️Please, support this idea with a like and comment!❤️
Long
by VasilyTrader
15
USD Retracement Incoming!! Must Watch Hello traders! Please see our breakdown and opinion of the current Usd index. Breakdown - Price has been respecting this bullish dynamic support since late October and we have seen multiple tests of this area as it ascends. We have identified what we think is some 4hr exhaustion in the orange box. It is also apparent from the daily time frame that may have ran out of steam and at the very least a correction is about to be forthcoming. We have a bearish bias for the Usd Index for W/C 06/12. There is some additional confluence factors we however would like to see : - : - we would like to see price break and close below our ascending trend line. : - we would like to see price retest our trend or our structure area. Note the analyses from this index will be used to add confluence to any Usd currency pairs that we are monitoring next week. Let me know in the comments below what your thoughts are on the Us Dollar just now and if you like the content and want to see more like this hit the follow button and give me a thumbs up! The Fx Charist
FX:USDOLLARShort
by TheFxChartist_
DOLLAR INDEX (DXY) Important Decision Ahead! 💵 Hey traders, Dollar index is approaching a key weekly resistance cluster. 94.6 - 95.0 is the decision zone. Depending on the reaction of the price to that I see two potential scenarios: In case of a bullish breakout of the yellow zone, a strong bullish continuation will be expected. Next resistance will be 96.0 level In case of a bearish breakout of a support line of a rising wedge pattern, a strong bearish movement will be expected. Next support will be 92.0 level Wait for the reaction first, then follow the market. ❤️Please, support this idea with like and comment!❤️
TVC:DXYShort
by VasilyTrader
22