how do you see the dow index going today Dow Jones and S&P commentary: Signal Watch Dr Bob Hard Right Edge Raptor Research Charting by Snoball: Dow Chart S&P Chart Drinks & Break Time at: GD's Famous Tea Room & Watering Hole"

DOW JONES @ LIVECHARTS

The Smart Money Flow Index has long been one of the best kept secrets of Wall Street. Everybody knows the importance of a closing price and other last hour indicators like the Closing Tick. The Smart Money Flow Index is therefore calculated by taking the action of the Dow in two time periods: the first 30 minutes and the close. The first 30 minutes represent emotional buying, driven by greed and fear of the crowd based on good and bad news There is also a lot of buying on market orders and short covering at the opening. Smart money waits until the end and they very often test the market before by shorting heavily just to see how the market reacts. Then they move in the big way. These heavy hitters also have the best possible information available to them and they do have the edge on all the other market participants.

The Smart Money Flow Index is calculated like the Advance-Decline Line. Just start at any given day, subtract the price of the Dow at 10 AM from the previous day's close and add today's closing price. The result is plotted on a chart, together with the closing price of the Dow only. Whenever the Dow makes a high which is not confirmed by the SMFI there is trouble ahead. It is said that this indicator is suitable only for investors with a longer time horizon but it's worth watching on a daily basis all the same. Such investors should buy blue chips when the indicator gives a buy signal, and sell and sell short on a divergence.

The most intelligent way to approach the markets is to watch what the so called "smart money" and the so called "dumb money" is doing. The dumb money, or the so called "crowd", are getting consistently beaten by the more street smart and very shrewd, professional and experienced traders.

My DMF Index is not an exact reversal of the SMFI but a proprietary index calculation that also contains a volume weighted aspect.

jeroo

thanks for that.

did i read earlier that you had a thread dedicated to S/D MF's ?

I posted similar comments over on a notoriously bearish BB US thread. Even when faced with bullish facts, the posts remain bearish so I thought I'd throw in a little weight to balance things up a bit. It's purely ad hoc posting as I find the comments that "we are done for" pending an '87 style crash somewhat galling - even though I tend towards the bearish outlook. Mind you, an image of a wagging finger with Henry Weingarten on the end of it just popped into my head.

fat finger

Jeroo

Much more sophisticated explanation than I would have given - many thanks.

terod

By smart money I'm simply referring to the institutions and professionals who decide market direction and move it to their maximum advantage. All I try and do is ride on their coat tails!

Afternoon everybody:
Nice to have jeroo and jojo on board with us.
I reckon the market is going to open higher today and am getting ready for some quick stabs at longs.
What are your views and what levels are we likely to reach today and resistance levels .

rgds
zarif

Thank you zarif - that's a nice welcome

Looking at the ES Z3 futures which ticked up as high as 1045.25 and has stayed bound within 1.25 points for the last 4 hours, it's looking steady for a rise at the open at least. I'll be watching Thursday's high (1048.28) to see the reaction to that level. The YM03 futures put in a high of 9734 a couple of hours ago but has since settle back down towards 9715.

Earning will be in focus with a fair amount of the good news priced in to stock. Perhaps selling news? Especially if earning come in only in line. Motorola have set the ball rolling already with earnings topping expectations coming in at 5 c per share - Thompson First Call est. was 3c.

Ok - back to work. I'll pop back later this evening

Thanks zarif.

Difficult market this week with lots of important earnings announcements to digest. However today I am looking for a retrace if S&P reaches 1048-50 early on.

Good Luck.

if i may....

re the MA's shown above on FTSE and DOW very much show buy and sell signals as i read the charts.

what is the reasonsing for the 34 and 55 days - is this someones tried and tested method (please excuse the nature of my question(s) but am new to trading indices and just want to understand what i'm seeing/reading.

the crosses appear v.specific/accurate indicators for short-term trading - is this what i'm meant to interpret?

thanks in advance.

zarif - best of luck today !

it's me again, just had a thought....those MA's aren't minutes are they? in the post above i assumed days...

thanks.

tammy.

terod,

34 and 55 are nice Fibonacci numbers.

1,2,3,5,8,13,21,34,55,89 .........

Thanks terod:
Just closed the first long of the day opened at 9669 on friday and closed at 9750 =81 pts @25/pt nett gain of 2025.

Just looking for some shorts now.
Will let u know how i get on.

rgds to everyone and happy hunting

zarif

zarif

i'd love to see what's on mrs. zarif's shopping list week !!! well done.

t.

Terod:
Nature has palyed agood hand and by the way I had luck smiling on me as she has gone to pick the kids from school and not back yet!!!
I wonder how long i will be able to contain it to myself.
Anyway better to give to her than Mr.Gordon brown or Ig index or ....

As they say "the hand that gives is the hand that reaps"
Waiting for the shorts to conme in play now- will let u know


rgds
zarif

As Hilary pointed out, the length of the period used is a matter of choice and preference. Fibonacci followers would no doubt favour Fibonacci numbers in their moving averages eg. 3, 5, 8, 13, 21, 34, 55 etc.

Well done to all those that played Dax - what a corker - it's now not very far away from my target and is looking good to fill that gap at 3559-3602.

Boy oh boy it is frustrating:
The dow is stagnant and bobbing around 9732 - 9740 Dow DEC fot the last hour.
Will somebody pull it "downwards" please.
I have a feeling it will trek south before going north again.
Come on guys take the profits and sell

rgds
zarif

I'm with on that - short at 9767 (cash) with a stop just above HoD

Nice drop! I guess the SPX didn't like Thursday's high after all. Moving stop to just below entry (trying to resist the temptation of taking the 20 points)

Moving stop down to lock in 20 points whilst the Dow continues to coil.

Ok - cut and run job here. 29 points for the trade and good night.