July 7, 2011

DJIA or Dow Jones Industrial Average

When properly analyzed, the Dow Jones Industrial Average, or DJIA for short, helps investors determine the Stock Market's overall direction (known as the trend) and the strength behind it - measured by trading volume. Proper interpretation of these factors assists Stock Traders in identifying proper entry or exit points to purchase or Sell their stock positions. For example, when the Dow Jones Industrial Average has been consistently falling, buying stocks long, would not be advisable. Waiting until the DJIA has started to rise again, gives an investor a much better chance of entering a stock position which is profitable right from the start and will turn into a profit if sold at the right time (before the DJIA begins to fall again). These cycles occur and will continue to occur. The Dow Industrials gives a general measure of not just stock market direction, but of general business and economic conditions as well. For example, a falling DJIA is unlikely to be occur at the same time the economy is booming.

In fact, many investors and economist believe the stock market reveals economic conditions about 6 months in advance. This means a rising market, reflects collective investor optimism of near term improvements of economic conditions. The reverse of course is also true. Falling markets may reflect investor pessimism for improvements in the economy, in the near future. These characteristics gives the DJIA even more value, using it to as a barometer to measure the performance of the general market, and economic conditions. These combined characteristics, makes the Dow Industrial Average a powerful forecasting tool for any investor. Below are the companies in the Dow Industrial Average. The list is sorted in alphabetical order by ticker and includes Sectors and Industry Groups, each company belongs to. I have also created a table and embedded live charts of the Dow Jones Industrial Average on my website as well as live updating charts of the Dow Diamonds, an ETF that is designed to track the movements of this Index.

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