dow 10

dow 10

Also known at the Dow Jones Industrial Average, The Dow is a measurement of only 30 stocks and their joint price movement in a day. These stocks are traded on the New York Stock Exchange and are the cream of the crop – The Big Boys.

All Dow 30 components can be found online. Sample stocks include 3M, AT&T, Chevron, Hewlett-Packard, The Coca-Cola Company, and Wal-Mart. There are 30 total and, if you know something about prices, these are not necessarily the highest-priced stocks around. They tend to be highly regarded stocks, well funded and relatively stable. They also represent a variety of business elements meaning they encompass resources, technology, oil, retail sales, food, banking, etc.

The daily average that we hear about on the radio, in the newspaper, television, and your favorite mobile device represents a measurement of market price movement for all 30 stocks. The average is computed by adding the prices of the 30 stocks together and dividing by an adjusted denominator. From these numbers we get a high and low for each day.Currently the Dow is in the 12000 range. This number only means something relative to the history of the Dow but over time, one gets enough information to be able to make predictions for the future based on analysis of the present and the past. Some people think the ups and downs of The Dow are like the gospel.

They believe that if The Dow went up 3% or down 2%, this is representative of the entire investment market world-wide. Others look at The Dow as one of several indicators that, when combined with other stock groups and various economic factors, can help determine future plans and potential trades. The Dow, in my mind, is only one piece in a huge puzzle. When you keep track of it over a period time it does start to feel like it probably matters!

More questions? Please join the question segment of Chris’ website at [http://www.HelpingWomenTrade.com]

Chris Best, M.A. started trading in 2005. She has learned a lot in a short period of time. Chris has traded stocks, options, and futures. She has day traded, swing traded, and traded long term. She knows about margin, stops, limit orders, etc. Chris hosts a site called Helping Women Trade that offers information for newbie traders. There is a lot to learn. Chris has an M.A. in Communications and has written numerous articles and 2 books.

If dow drops 10%, what is the net loss (in dollar amount) to the market?

You cant predict it. It will vary depedning on which stocks cause it and how much each one drops. Dow is NOT a capitalization-weighted index.

Dow (10-02-09) Technical Analysis Opinion