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Stock, Dow Jones Industrial Average, Stock market What is a Stock Index and How to Find Market Reversals – NASDAQ, S&P 500, and Dow Jones

It was a bloodbath absolutely so in this video i’m going to do something a little different. So for those of you been following, i typically cover you know stocks things like that. Specifically, but in this video let me learn you something: okay in this video we’re, going to talk about how to kind of predict these market reversals right, how to kind of forecast them right me. Personally, i kind of smelt this coming, but obviously i don’t know the exact timing of that, regardless i’m going to walk you through, you know. How can we do this step by step, at least from a technical standpoint? I know there’s a lot to this right, but from a fundamental standpoint, i’m going to walk you through each of the major indices i’m, going to explain what each one is i’m going to explain to you right how you should keep these in mind while you’re looking To invest and trade in your stocks now before i get started smash that, like button baby, also feel free to comment below again i’m going to miss some details. What i’d like to see in the comments section is some suggestions on some resources. We can find right. So i’m, going to talk about more technicality, things right i’m. Not going to talk about. You know, resources we can refer to because there’s so much that influences the market. But from a technical standpoint, you can still bake in some predictability and of course feel free to subscribe to the channel.

What you get is daily uploads on some of the top stocks on wall street, including live streams. I host every week where you get to hear from me some of your favorite stocks share them with me. I’Ll do a quick technical analysis now quick plug. If you feel like joining our discord channel, nearly a thousand members now check the links below. I got some links to my patreon page, where you can hop on in and join the community we’d love to have you enough plugging let’s get right into it, guys, okay! So here i have a trading platform known as think or swim. Okay, now i’m going to pull up some of the top indices right stock indexes for those who don’t know they’re, essentially a nice benchmark for kind of seeing how the market is moving. So let’s talk through each one of these, the first one that i have here up on my screen is referred to as the nasdaq 100, so you might hear the term quite often known as futures, right or indices or index. Right again, these kind of are a good benchmark there’s how people kind of forecast the market a lot of hedge funds, use this a lot of financial firms like to refer to these. So they can. You know kind of forecast the next price movement overall for the stock market. Again this is the nasdaq 100. So what is this? This essentially is compiled of the top 100 technologically based companies, both u.

s and then companies outside of the united states as well. Okay, so that’s what’s a little bit unique about this it’s, not all united states companies but it’s, a good benchmark for tech sector stocks. I personally refer to the nasdaq very often quick, highlight guys right check this out right, huge selloff today, and it does look like we are still sitting in pretty good momentum now. The main point i want to make here right: how did we, how can we see this technically coming? Well, if i ignored today’s movement right? If i take this out of the picture which is essentially today, generally speaking, you can see right. We were extended to death right generally speaking, we’ve been kind of sitting in this ascending channel pattern, which is good. The market’s been bullish right, we’ve been kind of bullish ever since covet, especially the tech sector. So you won’t see as much of that dip down here. Why? Because they had companies like zoom in it, and things like that, just a lot of those tech, heavy stocks that were kind of just keeping the market a lot more stable. Now, as you can see right, we were extended to death right this stock. This this index was running up non stop for about six days straight. We saw a little bit of a correction and then we tried to come back and then we just had our huge sell off. So arguably, this is very healthy.

Right. We’Ve seen this historically multiple times this green line down here this green line down here i like to refer to as my 180 day moving average that’s what it is, and you can see historically right, we’ve touched it multiple times and we rebounded every time and now That we’re approaching that level, i feel pretty confident that we could rebound pretty soon. But, however, like i tried to mention, we are sitting. We are sitting technically in some pretty good negative momentum right here. There’S a couple indicators you can cross reference as well, such as my macd indicator right there’s, a price momentum indicator we’re still sitting in pretty bearish momentum right now, but the rsi does look favorable essentially like stocks are highly discounted right now, as they are very oversold Right so let’s talk about some of the other indices, while we’re at it here, so the nasdaq 100 that’s a major index, the next one everyone knows everyone’s heard about is the dow jones industrial average. So the dow jones represents essentially 30 of the largest and most influential companies in the united states. Okay, so these are all u.s companies. This is known for like more your blue chip stocks or, like your high dividend companies. Now again, as you can see, the dow jones didn’t suffer much of a selloff but it’s kind of overdue right now. The dow jones is really the only index that kind of held strong today and a lot of is because a lot of the dow jones is comprised of like a lot of retail esque stocks right retail did fairly good.

Today, retail has been kind of recovering right as part of the world is reopening there’s a lot contributing to this again, technically speaking, it’s a little extended right now. I think the dow jones has opportunity to sell off next, but you know, historically speaking, dow jones is it’s been cruising pretty good we’ve seen one substantial dip in about the last, what three months uh but other than that it’s been cruising pretty good, it’s been holding Strong about the above that line versus the other index, which was the nasdaq let’s talk about the third major one, which is the s p 500. This is perhaps the most significant index. In my opinion, that represents the overall health of the u.s stock market. So, as you can imagine, the s p 500 is the top 500 companies in the u.s stock market. It represents 80 percent of the total value of the u.s stock market so again that’s. Why it’s such a good benchmark and as you can see, the s p had a little bit of a dip today as well? Okay, so right it’s explaining a lot of things right technically speaking, you can kind of forecast this. This thing was extended to death, but it’s kind of like the dow jones in a sense right, it’s kind of holding above here pretty well had that same kind of dip. You know that we saw within the last three months but other than that it doesn’t really sell off as aggressively, but you can see right.

It is approaching that potential point of a reversal, potentially speaking whole assuming that we’re holding this dynamic support line now i’m, going to throw in some bonus indices in here as well, that you can also use in correlation with these other three major ones. But these three major ones – these are known as like the futures, the dow jones, the s, p, 500 and nasdaq. You want to keep those on your back pocket when you’re looking to jump into a stock at any point in time, it’s always good to consider that. Okay, bear that in mind the bonus one i want to throw in here. First of all, it’s called the vix. This is essentially the volatility index, one real easy way to utilize. This is that, essentially, this is going up. That means, market volatility and and kind of the margin of volatility has been increasing so again, another way to look at this is kind of inversely correlated to the market. As volatility goes up, the market typically experiences an aggressive, sell off in some sectors more or less, and you can see as we pushed up today right. The vix is up 6.35 that’s huge, but the rest of the other major indices are essentially down, except for you know the dow jones, which didn’t really move today at all so that’s that and then the next one you can use – and i like to use this One this is known as the russell 2000, so the russell 2000 is really good.

This essentially comprises of 2 000 small cap companies, hence russell 2000, but the small cap companies right. This is a good benchmark for essentially like major penny stocks right. So this you know the way that this is performing can typically correlate with how penny stocks are performing so it’s good to always have this full list of indices as a benchmark me. Personally, i like to use these top five. I think they’re fine right if your three majors write the sp, dow and then also the nasdaq 100 and then, of course, you have your side guys right, you get the vix which is good for measuring. You know forecasting volatility, and then you have the russell 2000. If you like to trade penny stocks, because i know you guys love them – penny stocks, baby let’s go now let’s talk about how we can play this right. So i talked about technically how we can somewhat forecaster right. You can just look at it as any other stock right. If this thing is pushing up like a machine right, it’s it’s due for correction, then i think the nasdaq is the best representation of this right. Look at the nasdaq today right, you can see over time right. It rebounds nicely every time right, nine times out of ten, this thing rebounds as it approaches generally my moving average line here now that we’re in the vicinity of it right. We can still sell off it, doesn’t necessarily mean by the dip, but i think there’s a lot of dip buying opportunities.

Why? Because, historically speaking, it’s just been appreciating right, this is called a correction. This is totally healthy, totally normal in the stock market. That’S. Why? In all my videos, i always disclose. Whenever i talk about a stock, i do technical analysis. I always disclose anything can happen in the stock market. Unfortunately, that pullback happened today. It could happen tomorrow. It could happen. You know two trading days ago, right which is thursday um, but anything can happen that’s all you got ta be ready for, but these if you coincide these indices with your ultimate trading plan or investment plan strategy, this can ultimately help you in the long run. So the next thing i want to talk about is you know? How can we trade these? How can we trade the red days? It is very possible now i’m, not talking in sense of, like you know, the companies that are outliers right, there’s, going to be companies where the whole market is taking a dump, and these companies will still be appreciating a lot of that can be high manipulation momentum, But how do we actually trade these? What are some stable etfs that we can trade? Now you got to be very careful with these. I don’t highly advise it for the faint of heart, but if you are experienced of a trader, we can look at inverse etfs. One of them is known as the sqqq. This is a good one. You can play now.

One thing i’ve got to be constant of right. This is a short term thing. This right. This is a quick like day trade strategy. I wouldn’t even swing trade. This to be honest, why? Because you can see this thing decays over time. Why is it decaying over time because it’s inverse to the market? The market is always appreciating over time net on average and that’s why the united states goes baby, but you know look at this today. This guy was up eight percent. We could have played this today if we kind of forecast it ahead of time. Hey the market looks like it’s just it’s just going to keep on with this negative momentum right. We could have made some nice gains today. If we look at it again, what’s on the one day chart this thing chucked up like a machine, so these are some inverse etfs now there’s, another inverse etf that we can use to trade in the red days right. The blood base let’s talk about an sp xs. This is also a phenomenal one, but again it’s not for the faint of heart it’s, not as cheap as sqqq, but in my experience, it’s been a little more volatile, so there might be a little more opportunity there, but again high level right 180 day chart. You can see this thing decays over time, but again add this to your list. If you are experienced for opportunities on down days in the market, this one was only up 2.

24. So sqq was the better and more volatile play today. But again you can play either. One of these sqq is very, very cheap, though 1352 at the current share price, so not too bad there. But again those are just some strategies you can utilize in those bloody days. I hope this video helped you out today. Guys again, i know it’s a little different here, but i need to start. You know trying to help you guys a little more on this channel and i think part of that again is taking a step back. Okay, let’s learn from today right it was red for everybody, everybody lost tons of money. I lost tons of money. I get it right either way. These are some strategies you can utilize. Okay, let’s, look at the key indices. I look at these relentlessly every time i wake up. These are the main things i look at right. These tell me whether or not it’s going to be a red day if you’ve ever wondered how people kind of know that they benchmark the major indices right. They look at the dow jones, the s p, 500 and the nasdaq. I highly recommend those the vix and the russell 2000 that’s more of a preference, but you can coincide it with predicting the ultimate market movement. So i hope this video helped you out today guys smash that like button and feel free to subscribe to the channel, what you get again is daily uploads from your boy on some of the top stocks in the market.

Today. Also, i host live streams twice a week in the middle of the week and at the very end of the week, typically on sundays, leading up to the following trading week. So i can get you all fired up. You can share with me some of your top stocks as well. Also, if you’re interested in joining our discord channel check the patreon links below come on support the channel i got you covered, you can hop into our discord. We have nearly a thousand members right. Good luck to you guys the rest this week. Hopefully you can jump into some cheap opportunities right by the day, but essentially don’t write into the fomo right. Like i like i mentioned right. I think the momentum is still there. I think we could sell off a little bit more, but let’s wait for confirmation of a reversal in the overall market.

What do you think?

Written by freotech

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