You're camping deep in the woods. No phone reception and no data. Yet, you still want to know what the weather will be like today. So you dip into your scout training and look for some weather indicators...things like temperature, dew point, barometric pressure, stampeding deer, etc.
Market indicators work the same way. They allow you to test how the market is performing. Each one provides a part of the picture...taken together, you can often figure out what's on the horizon.
Market indicators include things like the advance-decline line, a measure of how many stocks are moving up versus how many are moving down. Or moving averages. These flatten out day-to-day volatility in a stock's (or index's) performance and shows the longer-term, more stable trend line.
Related or Semi-related Video
Finance: What is the S&P 500?45 Views
finance a la shmoop. what is the S&P 500? well the S&P 500 is just an index- that
is the standard and poors company assembled 500 stocks put them on a
spreadsheet- this was a spreadsheet in 1957 -and they tracked them. [spreadsheet pictured]
well the index had something like 37 shares of Procter & Gamble, the 23 shares
of Ford, 18 shares of IBM and so on. in the 1950s the S&P 500 totaled something
like 40 maybe 50 bucks on a good day. at the end of each day the elves who worked
inside of the S&P Factory, they would add up the shares basically ignore any
dividends and send to the press a total which was published to more or less
everyone who cared about investing. well not nearly even a century later the 40 [man reads newspaper]
to $50 reign to the SNP is today knock on the door of 2,500 .so without even
having dividends reinvested you'd have made 50 times your money with dividends
reinvested to buy more shares instead of keeping the cash to buy you know
groceries or electric massage slippers. you'd have made over 70 times your [grocery display case and slippers pictured]
original investment. welcome to America.
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