Tuesday, July 20, 2010

Todays Stock Market Investing Recap

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Today's stock market investing recap brings good news to us today as all the market indexes closed higher on higher volume. Volume is still below the average but I think this is still good news. Apple's earnings beat estimates and provided some good news for the market. Remember as part of your stock market investing daily routine, your first step should be to determine the direction of the general market indexes to see if they are in an uptrend or a downtrend.

The first steps in deciding what happened in the stock market today is know which indexes to check. You want to primarily look at four. They are the S&P 500, the Dow Jones Industrial Average, the NYSE Composite and the NASDAQ. You can feel free to check other indexes and indicators but when you are getting started focus on these.

Just know the closing numbers for the index really isn't enough, you need to compare them to the previous days close. The numbers you want to focus on are the closing price of the index and the volume. Here are the things that could happen each day.


  1. The market closes higher than the previous day on higher volume - This is what you want to see. This means the market is under accumulation, or buying. When this happens when the market is currently in a downtrend, it could represent an attempted rally or a follow through day as well.

  2. The market closes higher than the previous day on lower volume - This could represent stalling action as buying did not push up the price of the index but it went up anyway. It's good the index went up but not with big money behind it.

  3. The market closes lower than the previous day on higher volume - This is a sign that the big money is selling and is called distribution. While one distribution day doesn't turn the market down, several within a short period of time will end an uptrend.

Start your study of the indexes with these rules in mind and you'll soon find that you'll be analyzing the days market action like a pro.

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