December 21, 2010

World Stock Markets Discovery

A major discovery of mine, relates to the "synchronicity" of world stock markets. Every morning, I get up and watch several lists of companies I've selected, grouped into 20 per list. Using my online brokerage account, I watch these stocks along with the major U.S. Indexes: the Nasdaq, Dow Jones Industrial Average and the S&P 500 Index. When a stock price of a company I'm watching that day goes up, it flashes green on the list, when its price goes down, it flashes red. Over months, I observed times when nearly all 20 companies on my watch list flashed green or red simultaneously, a quick glance at the major indexes during those moments, revealed they moved up or down; mirroring the collective action.

It didn't matter what list I chose, the phenomenon was the same. Observing this consistently, I thought of a river flowing but instead of water, these currents were generated by flows of buying and selling (Money moving in and out of stocks). I wondered about the broader implications of this collective action. What impact (if any) did it make over several days, months, years or even on other major indexes? I was pleasantly surprised and unprepared for what I discovered. I created a power point presentation to show what I found, and will now share it with you. It is the next posts entitled, "Stock Market Analysis"

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