Forecast and levels for S&P 500 - page 39

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Producers of raw materials and the automotive sector have been among the worst performers at a time when fears over trade tensions between the US and China are returning. Investors’ attention focused on the companies that presented their quarterly results as well as the Central Bank meeting.
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The technology sector is expected to be in the spotlight after Apple's behavior in the New York session. Investors are waiting for the US employment report.
Sergey Golubev
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Press review

Sergey Golubev, 2018.08.04 10:41

Difference Between Dow, Nasdaq and S&P 500 (based on the article)

In the U.S., market participants focus the majority of their attention on three indices – S&P 500, Dow Jones Industrial Average, and Nasdaq 100. These indices are of course highly correlated to one another as they track companies impacted by the same business cycle and other important macroeconomic factors.

Additionally, there is some cross-over in the stocks that are included in the ‘big three’. For example, the technology giant Apple Inc. (AAPL) is a constituent included in all three. However, there are big differences between the Dow and Nasdaq and S&P 500 - such as the number and type of stocks included in each index and how index values are calculated.

How is the Dow Jones, Nasdaq, and S&P 500 Calculated?

The S&P 500, created by Standard & Poor’s in 1962, represents the broadest measure of the U.S. economy among the three major indices. The index value is calculated by weighting each company according to its market capitalization and then a divisor, which is set by S&P, is applied to produce the final value. The simple calculation is as such: sum of the market cap of all stocks included divided by the divisor, or total market cap / divisor. 

S&P 500


The Dow Jones Industrial Average, often referred to in short as the ‘Dow’, is the oldest index, dating back to 1896 and is the most globally well known. The Dow represents 30 large cap stocks as determined by the Wall Street Journal. Unlike the S&P 500 and the Nasdaq 100, the weighting for each component in the Dow Jones Industrial Average is ranked by share price, and then a divisor applied to create the final value.

Dow Jones Industrial Average


The Nasdaq 100 is the youngest of the three indices having begun trading in 1985. It represents the largest non-financial companies listed on the Nasdaq exchange and is generally regarded as a technology index given the heavy weighting given to tech-based companies. The Nasdaq 100 is based on the market capitalization of its components.

Nasdaq 100

Trading Differences Between Dow Jones, S&P 500 and Nasdaq

Despite the tight correlation between the major U.S. indices, they each have their own ‘personalities’ in how they trade due to the differing make-up for each index and importance of certain companies and groups of companies (sectors). The S&P 500 is the least impacted from day-to-day by any single one stock given it is comprised of so many names. With that said, there are a handful of sectors which have the most importance on the index.

Major Differences between Dow, Nasdaq and S&P 500: Breakdown of weightings - 

Differences between Dow, Nasdaq and S&P 500

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Chart was made on MT5 with Brainwashing system/AscTrend system (MT5) from this thread (free to download) together with following indicators:

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Same systems for MT4/MT5:

The beginning

  1. ASCTrend system, the beginning, part #1
  2. ASCTrend system, the beginning, part #2
  3. ASCTrend system, the beginning, part #3
  4. ASCTrend system, the beginning, part #4 
  5. Digital ASCTrend (Digital Filters with ASCTrend system combined).
  6. LabTrend (LabTrend indicators, LabTrendZigZag, templates, Labtrend EAs) - the thread 

After


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In the current context of deteriorating economic conditions in Turkey, the US market had slight losses. The technology sector was off the rule, with some gains.
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Yestrerday the Turkish President defended a retaliation against Washington for the worsening of the tariffs applied to imports of aluminum and steel coming from Turkey: Recep Tayyip Erdogan threatened to boycott the US electronic products, including the iPhone.
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benchmarks fell led by the Nasdaq 100 Index. Crude oil rebounded after slipping below $65 a barrel following a report that American stockpiles rose the most since March 2017.
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European markets have recouped some of the losses recorded in recent days, given some relief over the crisis in Turkey and the US-China trade war. Encouraging the most positive sentiment from investors came the news that China accepted the US invitation to visit the country later this month to negotiate bilateral trade issues, as well as the announcement yesterday of Qatar’s financial support it promised to invest 15 000 M.USD in Turkey.
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European markets ended lower in the last day of the week, under pressure from the continuing fears and uncertainties associated with the situation in Turkey and the trade relations between the US and China. The banking sector, given the exposure of some institutions to Turkey, led the losses, while the technology sector was penalized by the news about the North-American company “Applied Materials”. In Paris, Air France-KLM devalued 3.54%, after confirmation of Benjamin Smith as new CEO. On the Eurozone, Eurostat reported that inflation in the region reached 2.10% in July, one tenth higher than in June and the highest since December 2012. In the European Union as a whole, inflation stood at 2.20 %, also a maximum since December 2012.
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The US market was trading higher, with S&P and Nasdaq reaching new all-time highs. Investors’ decisions were still being influenced by Friday’s words from the President of the Fed and the agreement reached by the US and Mexico. During the weekend, a head of the Mexican delegation had advanced that the negotiations were going well and today an agreement between the two countries was announced. Now the talks will extend to the other NAFTA member, Canada.
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The performance of the American indices is a favorable force to European markets given the high correlation between markets on both sides of the Atlantic. In fact, in the last two years, all the upward movements of European stocks were preceded by rallies on Wall Street. 
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