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How to read the
Dow Jones Industrials Indicator?
When interpreting the chart above, you need to remember
that the most important factor is the relationship between Index
Price and the Volume Moving Average (VMA).
Here we see that the index has taken an advancing trend with not much
supporting volume to cause this change. This occurs because investors
are taking profit from covering their short orders; this causes the
market to increase. When the VMA has peaked, professional investors
once again enter into a short position by selling; this action causes
the index to trend down again. It is just after this VMA peak that one
should make a trading decision.
Below is an example of how one of our exclusive
institutional investors used this signal for
the index to maximize profits by
trading some of the derivatives of the Dow Jones Industrials index:
Details of the above trades, and the derivatives used for this index, can be found in the detailed overview and in the member's section of our site.
Listed below are some of the derivatives
which you can trade using this indicator:
| Securities |
Issuer |
Type |
Symbol / Root |
|
DIAMONDS |
AMEX |
ETF |
DIA |
|
Dow Jones Industrial
Average "MITTS" |
Merrill Lynch |
ETF |
MDJ |
| DJIA "TIERS" |
Structured Products Corp. |
ETF |
ISB |
|
Dow Jones Industrial Average |
CBOE |
Options |
DJX |
|
Dow Jones Industrial Average LEAPS |
CBOE |
Options |
MUT |
|
Dow Jones Industrial Average |
CBOT |
Futures |
ZD/DJ |
|
Dow Jones Industrial Average |
CBOT |
Options on Futures |
OZD/DJC calls
DJP puts |
|
By trading index securities using our volume
indicators instead of stocks, you gain stability and predictability that
stocks do not have. An index is a far more logical in its actions than
the individual stocks it is based upon.
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