Amazing Video on Historical Stock Market Graph.

stocktock.com 7/11/08 ~ Stock Market Technical Analysis

Hope you enjoyed that video. Here is some Interesting Reading.

Smart Stock Investing With Trading Signals

Trading signals are one of the watchwords for making money through a brokerage account. In a nutshell, for the market and commodity or stock or currency you’re trading in, a trade signal is something that indicates it’s time to buy, or to sell, that particular investment.

Accurate trading signals are one of the key secrets that lots of smart stock investing advisors try to convince you that they’ve got that the rest of the market doesn’t. And they’ll try to show you by loading lots of trend lines and graphs, matching prices against a time sequenced trend line.

Let’s break down the numbers though because a lot of trading signals are, quite simply, common sense. The most common trading signal is when a price suddenly drops which is usually an indication that it’s time to sell and capitalize on your gains to date. Use of this trading signal is one reason why stock markets and commodity markets are considered volatile.

When something dips in price, everyone is trying to unload, and a trend can turn into an avalanche.
Because this trading signal gets programmed into so many automated trading programs, there are even regulations that close the market when it loses a given fraction of its volume.

So, that’s the obvious trading signal on price declines. What’s another good trading signal on buying a stock or commodity? For investments that are less prone to quantitative analysis look to the daily news. This is the reason why investment brokers always have the news on. Any kind of news that impacts national security will make most stock markets go down. An absence of news covering national security will allow you to focus on what sectors are growing rapidly in the economy.

Within the economy you want to keep an eye out for companies that are making new products, or reaching new customers with existing products. Ultimately, everything comes down to getting products to consumers. Watch for supply chain issues which can cause hiccups in price, and even long tem rising prices in a stock.

For commodities trading, you’re looking for indicators of supply as well. Oil is and examle of this. When there’s a war in the Middle East, oil prices rise. When new oil fields are discovered, the price of oil companies may go up per share. But watch out because the price of oil itself may remain flat, or even decline a bit. Oil can be a very inelastic commodity in terms of supply and demand.

Branching out from oil, commodity trading signals for agriculture include the price of oil since it takes oil to make fertilizer and get produce to market. Bad weather can negatively impact crops, and even government policy decisions like subsidizing E85 ethanol affect the market.

Ultimately, you want to take all the data you can, and set your own victory conditions on it. Sell when the commodity reaches a given price, buy when you see a certain amount of upward movement in a certain period of time. Smart stock investing is all about using those prices over time trend line graphs and marking the historical reactions to outside forces.

About the Author

Matt blogs at http://initialpublic.com/finance/ and invites you to find more smart stock investing tips.

While you are here …

Where can I find a graph or table which delivers historical annual stock market trends for Blue-cap, Mid-cap?

I need to put together a table, or chart, for a stock market game my company is going to play at our offsite meeting. I need the REAL data from years 1970-1990 (doesn’t necessarily have to be those years, but about a 20 year span). I need to know, for EACH year, what percentage up or down the Blue-Cap stocks were for that year, the Mid-cap stocks were, and the Small-cap stocks were. I’m having trouble finding this simplified information (I’m also not stock saavy, as you may have guessed). An added bonus (but maybe much harder to find) would be a summary of things that happened that year… like “presidential election, fed reduced interest rates, oil went to $100 a gallon, etc.” If anyone has a website (hopefully a link to a specific page) that has this information it would be greatly appreciated!

We have a problem. First I think you’ve mixed Large-cap and Blue-chip to get Blue-cap, or at least someone in the office has. Be assured, there ain’t no such creature. And it doesn’t get easier.

I think what you want to do is get information regarding several major indexes. The Dow Jones 30 is made up of “Blue-chip” stocks. For your purposes the S&P500 would also work fine and you could probably make a case for the Nasdaq 100 as well. For small-caps use the Russell 2000. Unfortunately I am not aware of an index of mid-cap stocks.

“Cap” stands for capitalization which very generally tells you whether the company is large small or in-between.

You can certainly find the required large and small-cap data that you require but my guess is that it is to be found only on subscription sites. However trying Morningstar, Rueters, Barrons, Wall Street Journal and Investors Business Daily might uncover something.

If none of this works you will have to get creative. Many mutual fund companies have large, mid, and small-cap funds. By combining the data from half a dozen or so and determing an average you can probably get close enough to what you seek. The problem is going to be finding historical data that old for mutual funds anywhere, free or not. You’re talking 37 years ago and there were very few mutual funds in existance then.

I really think your best option is to go back to whoever concieved this question and explain to them that it is unanswerable. Then see if they’ll assign you a real one.

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