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Message
Stupid questions from a novice investor.
Posted on 5/23/22 at 7:37 pm
Posted on 5/23/22 at 7:37 pm
I don’t have much money in the market, really just enough to play with and I’m ok with losing, but I have a couple questions.
1. Why do the DOW, the S&P, and the Nasdaq mIrror each other’s movements so closely every day? If it’s trading algorithms, who controls these?
2. How does the Nasdaq have a negative $2 billion Outflow and still go up 1.59% like it did today? I’m sure this is elementary, I just don’t get it.
1. Why do the DOW, the S&P, and the Nasdaq mIrror each other’s movements so closely every day? If it’s trading algorithms, who controls these?
2. How does the Nasdaq have a negative $2 billion Outflow and still go up 1.59% like it did today? I’m sure this is elementary, I just don’t get it.
Posted on 5/23/22 at 7:46 pm to OldSouth
1. Because the big tech companies are major parts of all 3
Posted on 5/23/22 at 8:15 pm to OldSouth
All 30 of the Dow Jones companies are in the S&P 500 and make up roughly 30% of its market value.
Posted on 5/23/22 at 8:34 pm to OldSouth
quote:
How does the Nasdaq have a negative $2 billion Outflow and still go up 1.59% like it did today?
Link?
Posted on 5/23/22 at 8:46 pm to slackster
quote:
Link?
I’m assuming you’re just trying to make me look stupid. I don’t have a link, I saw the outflow on the Webull App where it shows the inflow/outflow of the NYSE and the Nasdaq. Why don’t you just explain it to me? I already said they were dumb questions.
Posted on 5/23/22 at 8:46 pm to OldSouth
These indices are weighted with some coMpanies like Apple carrying more weight than other companies for Nasdaq and sp500 so when it goes up, it has a bigger impact on the over index movements.
Posted on 5/23/22 at 8:51 pm to OldSouth
quote:
Why do the DOW, the S&P, and the Nasdaq mIrror each other’s movements so closely every day?
There are trading strategies that count on this happening.
Posted on 5/23/22 at 10:11 pm to OldSouth
There are days when they don't move in tandem, however sentiment about the economy, valuations, etc. affect them all. I don't think your questions are stupid, but I'm a moron, so there's that. Each day, the financial press attempts to explain why "the markets" performed as they did on a particular day. The truth is that there are a thousand factors that they don't even know about that have an effect.
Posted on 5/24/22 at 10:12 am to OldSouth
quote:The NASDAQ is down over 26% YTD while the Dow is down just over 12%. These indices do not always move in lockstep because they simply have different exposure to different types of US stocks.
1. Why do the DOW, the S&P, and the Nasdaq mIrror each other’s movements so closely every day? If it’s trading algorithms, who controls these?
quote:I think he was just genuinely curious where you got your number from (as was I). Take it easy brother.
I’m assuming you’re just trying to make me look stupid.
As Bdiddy mentioned, there are at least a dozen major variables on any given day affecting the movement of each of those three indices. CNBC will attribute one major factor to that days' performance, but it's really just for clicks because there are so many other factors at play. It's never as simple as it seems.
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