marketstrength - Updated Market Strength...

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Updated 01/11/2006 Market Strength http://www.investopedia.com/university/strength/default.asp Thanks very much for downloading the printable version of this tutorial. As always, we welcome any feedback or suggestions. http://www.investopedia.com/contact.aspx Table of Contents 1) Market Strength: Introduction 2) Market Strength: S&P 500 Futures 3) Market Strength: Advancers To Decliners 4) Market Strength: Relative Strength Index and Arms 5) Market Strength: Oil and Bonds 6) Market Strength: Conclusion Introduction There is an old saying that seems to always apply to the investment world: "hindsight is 20/20". When looking one, three or six months into the past, we can easily tell what the market did and why it happened. But if you are looking to discover the trends of the market today, where do you look? In this tutorial we will go over various indicators used by traders and brokers to find out where the markets will open and how they will trade throughout the day. This tutorial will include an explanation of S&P 500 futures, the advance/decline line, the Relative Strength Index, the Arms Index, the price of oil and bonds and the ability of these indicators to detect market strength. Long-term investors should be warned, however. Over the long term, these day- to-day fluctuations in the markets are nothing to worry about, and for them, the long-term upward drift is much more important. S&P 500 Futures If you've ever watched financial television before or after the markets open you will probably notice that they often quote the latest index futures price on the "bug" in the bottom corner. The futures market is an important concept and can be used to gauge the trend of the market. (Page 1 of 7) Copyright © 2006, Investopedia.com - All rights reserved.
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