Today's stock trader or investor needs to know the state of the current stock market. I could write down where the Dow is today as well as the other market indices, but that would only cover today. If you're reading this sometime in the future then you need to know how to determine the current stock market trend at that time.
Stock market results as a whole will vary greatly from year to year, quarter to quarter, and even day-to-day. Traders typically study various stock market reports to determine specifically where the market will go next.
The overall health of the market can be seen by looking at a variety of stock market indices. Indices are a way of judging a particular segment of the stock market as a whole. These indices are used to give us a view of the general health as well as trend of the market and serve as very useful benchmarks. Fund managers as well as individual investors and traders compare indices to the performance of their individual portfolios in order to determine whether they are ahead of or behind the performance of the market as a whole.
There are many different types of indices such as global, national, and even ethical stock market indices which may only include companies whose business practices are eco or politically friendly. There are even environmental indices which score companies based upon the environmental impact of the indices companies.
Some of the most famous indices are S&P 500, the Dow Jones Industrial Average, the NASDAQ Index, AMEX Composite Index, as well as foreign indices such as the Nikkei 225 and the British FTSE 100.
There are a number of different ways to get a feel for the current stock market. Some of those ways include trend identification. One method of trend identification that is used is to compare the current stock market high as with the 52-week high. The current stock market report might state that the Dow Jones Industrial Average closed above its 52-week. This would be interpreted as the bullish sign. Another way to get a feel for the stock market results is to see if prices are above or below the 200 day moving average. If the closing price is above the 200 day moving average, this too, is considered a bullish sign.
So to get a feel for the current stock market it is important to put today's market levels in perspective by comparing them with historical stock data. Using stock charts is probably the easiest way to get this information at a glance. A stock chart makes it simple to ascertain the prevailing market trend.
I like what you have to say here. This is the type of basic, fact-based information that beginning stock trader should be looking at in the first place.
Start simple — master the basics — build