Question: 1). The Dow represents 30 selected stocks, correct? If so, then what stocks? 2). If these stocks are blue chips, such as, Alcoa, IBM, etc., how does that represent how the market is doing? 3). How does one find out about dramatic selling?... In such pockets that are not Dow represented? 4). What are other models that show how stocks are doing?

PS: I don't think that the stock market is off topic (OT).

-- dw (y2k@outhere.com), August 20, 1999

Answers

(1) The DOW (30) Industrial average is a market indicator of the 30 blue chip industrial stocks on the NYSE. IBM is included.

(2) There are other, more broadly based averages, such as the Standard & Poors (S&P) 500. For smaller capitalized stocks, you might want the Russel 2000 or Russel 5000 indicators. The NASDAQ indicator is highly technology oriented.

(3) For selling (or buying, which should be the same number...), you might want to look at market volume for the NYSE or the NASDAQ. The "tick" is a measure of market momentum...which direction it is going right now! Number of losers vs. number of gainers is a good broad based indication at the end of the day.

(4) As to what all of these mean, that's a very substantial education, which can be expensive.

(5) My personal recommendation, worth approximately exactly what you pay for it, is to not buy equities until after the first of the year. Too much potential downside risk.

-- Mad Monk (madmonk@hawaiian.net), August 20, 1999.

Thanks for info.

We know that the Blue Chips are almost always strong - like the rich guy next door he/she can do almost anything he/she wants to and most people will bow at any of their wishes and desires - but what about the thousands of businesses that can't?

What I am trying to ask is: Do you think that the DOW is a represents a "true" eye on the market?

-- dw (y2k@outhere.com), August 20, 1999.

The Dow is in reality a big fraud. If a company that is in the Dow performs badly, it gets replaced by a better performing company.

So the Dow is not a true reflection of the economy or the stockmarket. If this action in the Dow had never taken place, the Dow totals would be considerably lower. Maybe even below 5000.

So basically the Dow is a scam!!!!

-- freddie (freddie@thefreeloader.com), August 20, 1999.

I agree, the DOW is a scam! My inquiry about the market was to find some kind of measurement that I could look at, since the ups and downs of the DOW represent the weasel factor.

It's so hard to maintain sanity in a world where bull$h!t rules.

-- dw (y2k@outhere.com), August 20, 1999.

Actually, you're both somewhat correct,but the Dow Jones Industrial Average is only an "indicator." The 30 selected stocks are considered to be the leaders in their paticular industry. The DJIA is only used as a gauge as to what the overall market is actually doing.Each of the 30 has a particular 'weighting'...ex: if IBM moves up ONE dollar, that is equivalent to approx. 6.5 Dow points.To find out what the overall market did for a particular day, look at the DJIA first, then the S&P500, then the NASDAQ...if all three were up, then it was a 'broad' market. If only one of these are up, then the market was 'selective' or "thin"that day.Your comment that the DJIA is a SCAM is completely irrelevant.

Keepon

-- keepon (vacillating@hourly.edu), August 20, 1999.