Note that you might be able to take a position on the Dow Jones on other websites.
US Stock Market Analysis and Trading News
[10:30am] We are expecting a small retreat from the Dow Jones after the US equity benchmark registered a record close last night.
The market is gearing up for the non-farm payrolls report on Friday, and the pullback in the US index futures is just a pit stop before the next leg up.
Update by David Madden, Market Analyst,
[10:21am] With the NASDAQ Composite having broken 5,000 and the S&P 500 and Dow Jones both having made new record highs on Monday, US markets are expected to pullback on Tuesday's open.
The eventual direction will be subject to a number of prominent retail earnings reports from the likes of AutoZone and Best Buy as well as the Redbook retail sales report for February.
Sentiment was lifted by somewhat of a 'Merger Monday' yesterday with two of the more prominent deals coming from HP which will buy Aruba Networks and PayPal which is set to buy Paydiant Inc.
The value of US-targeted M&A was up 13% in February from January but down a whopping 42% year-over-year in what has been a tepid start for deals in 2015 when compared with last year.
It has again been the healthcare industry leading the way; the two biggest deals were Pfizer buying Hospira and Valeant buying Salix.
AutoZone, Best Buy and Dick's Sporting Goods all report earnings followed by the Redbook index of same-store retail sales growth before the open on Tuesday.
Netflix announced it will begin its online TV and movies streaming service in Australia and New Zealand in March it what could be a big future revenue-boost for the company.
Shares closed higher on the news and now hover just below all-time highs around $490.
Futures suggest that the S&P 500 will open 1 point lower at 2,116, with the Dow Jones expected to open 46 points lower at 18,251 and the NASDAQ 100 9 points lower at 4,474.
Update by Jasper Lawler, Market Analyst,
US Stocks Lead Equities Higher Despite Inflation Miss
Whilst we saw some weaker CPI data from the US yesterday, the Dow Jones managed to rally to all-time highs which is providing a lift for stock markets this morning.
Traders are remaining cautious ahead of Thursday's ECB meeting and discussion of its bond buying stimulus programme and Friday's NFP.
Update by Craig Inglis, Head of Product Development,
Dow Jones Daily Market Analysis
The Dow Jones is currently trading at 18,251.
In the last session, the market closed up 103pts (0.56%) at 18,264.
30 Minute Indicator Analysis
The index is currently lower than the 20 period moving average of 18,254.8 and higher than the 50 period moving average of 18,224.3.
1 Day Indicator Analysis
The stock market index is higher than the 20 day moving average of 18,015.4 and higher than the 50 day moving average of 17,792.7.
Update by Gordon Childs, Editor,
[7:43am] Dow Jones Technical Analysis (30 mins chart)
Dow Jones pivot point: 18120
Our preference: Long positions above 18120 with targets @ 18310 & 18365 in extension.
Alternative scenario: Below 18120 look for further downside with 18030 & 17940 as targets.
Comment: The RSI is bullish and calls for further upside.
[7:40am] US indices rose on Monday led by shares in the Semiconductors & Semiconductor Equipment, Automobiles & Components, and Consumer Services sectors.
The S&P 500 (2117.39) remains above its 20 DMA (2084 - positive slope), and 50 DMA (2059 - positive slope).
European markets are expected to start on a negative note.
[7:40am] American Shares - Crossing Over their 50 Day Moving Average:
Alexion Pharmaceuticals (ALXN +2.36% to $184.62)
Avon Products (AVP +4.11% to $8.86)
Boston Properties (BXP +0.98% to $138.76)
Carnival (CCL +2.73% to $45.19)
DaVita HealthCare Partners (DVA +1.29% to $75.56)
Discovery Communications C (DISCK +1.87% to $31.08)
Eli Lilly (LLY +1.35% to $71.12)
Harley Davidson (HOG +2.36% to $65.07)
Keurig Green Mountain (GMCR +2.57% to $130.865)
Parker Hannifin (PH +0.88% to $123.77)
Regions Financial (RF +0.94% to $9.7)
T Rowe Price (TROW +0.96% to $83.39)
Tenet Healthcare (THC +1.56% to $47.02)
Time Warner (TWX +1.11% to $82.77)
Tyco International (TYC +2.46% to $43.26)
Viacom (VIAB +1.16% to $70.75)
Western Digital (WDC +1.68% to $108.78)
Xylem (XYL +1.32% to $36.17)
American Shares - Crossing Under their 50 Day Moving Average:
AES Corporation (AES -2.47% to $12.65)
Anadarko Petroleum (APC -2.62% to $82.02)
Devon Energy (DVN -1.19% to $60.86)
Discover Financial Services (DFS -1.18% to $60.26)
Loews Corp (L -1.02% to $40.59)
Navient (NAVI -8.83% to $19.51)
Noble Energy (NBL -1.74% to $46.41)
[6:31am] European equities are set to open mixed as they continue to tread water ahead of key economic releases.
Consumer spending in the US rose by 0.3% adjusted for inflation, signalling that the world's biggest economy is on the right track.
The optimism easily spilled over into equities and triggered another sharp rally, with the Dow Jones surging to a fresh record high after posting a gain of 106 points to 18,264.
Although US indices hit all-time highs overnight, the European bulls aren't taking it as a cue to blindly follow this morning, instead waiting for domestic fundamentals to provide the impetus.
Update by Jonathan Sudaria, Market Dealer,
[3:39am] The Dow Jones futures market closed higher on Monday as it extends the rally off February's low. The high-range close sets the stage for a steady-to-higher opening on Tuesday. Stochastics and the RSI remain neutral-to-bullish signalling that sideways-to-higher prices are possible near-term. If the Dow extends this winter's rally into uncharted territory, upside targets will be hard to project. Closes above the 20 day moving average crossing would confirm that a short-term low has been posted.
[4:47pm] The Dow Jones has rocketed higher in early trading as US equity traders fall back into the old habit of taking bad news as good news, and the disappointing economic announcements have just nudged back the possibility of any interest rate hikes.
The Fed's mantra is that rates will remain unchanged for at least 'two meetings', and now that the cracks are beginning to show in the US recovery Janet Yellen will be wheeling out that phrase for some time to come.
The jobs report at the end of the week will be the highlight for Wall Street, and dealers will be going over all the detail of the announcement, in particular the participation rate.
Update by David Madden, Market Analyst,
[3:40pm] US Stock Markets
US markets opened the new week slightly lower after initially looking to open higher as a mid-morning slide in Brent oil prices, and some disappointing economic data took some shine off the early optimism.
The weaker open proved pretty short-lived as the NASDAQ Composite hit the 5,000 level for the first time since March 2000.
The latest US personal income and spending data showed a consumer content to save their surplus cash in response to the recent fall in oil prices.
A deeper than expected fall in personal spending in January suggests that, despite rising consumer confidence, and fairly robust US GDP, that consumers remain very much in cautious mode.
The latest ISM manufacturing index for February didn't replicate the fall seen in last Friday's Chicago PMI but it did come in weaker at 52.9, with the employment component also falling back to 51.4, the second month in a row that it has come in weaker than expected.
These slightly weaker numbers have helped drag US markets off their lows suggesting that a US rate hike remains some way off, though this afternoon's rebound in the US dollar and sell off in the US bond markets, would appear to suggest otherwise.
In company news, HP announced that it was acquiring Aruba Networks for $2.7bn as it seeks to reorientate itself away from the PC market and more towards enterprise wireless networks solutions.
It is also worth keeping an eye on Apple shares after a couple of days of decline, particularly in light of this morning's announcement by Samsung that it will be releasing two new versions of a new S6 Edge mobile phone, complete with a curved screen.
Update by Michael Hewson, Senior Market Analyst,
[10:30am] US markets look set to take their cues from today's rebound in Europe which has been driven by the weekend actions of Chinese authorities in easing monetary policy further in response to a stagnating manufacturing sector and falling prices.
It's also set to be a key week data wise with the latest February ISM manufacturing numbers due out later today along with some key inflation data.
Friday's sharp drop in Chicago manufacturing could well be a leading indicator for disappointment in the ISM numbers later today after an unexpected fall from 59.4 to 45.8 in February.
While expectations for today's ISM are for a lower number they aren't expected to be anything like the fall seen in Friday's Chicago number.
A reading of 53 from 53.2 is expected.
Expectations remain fairly high that we will see some form of policy action by the Federal Reserve on interest rates later this year, however, this could well take a knock later today if core PCE which is the Feds main price targeting measure remains weak.
It is currently at 1.3% year on year, with a month on month rise of 0.1% expected.
Disappointing economic numbers are likely to keep a floor under stock markets as it would imply that rates are likely to stay lower for longer, though they could well sink the US dollar, which has continued to rise on expectations of higher rates.
The Dow Jones is expected to open 28 points higher at 18,170.7, whilst the S&P 500 is set to open 3 points higher at 2,107.5.
Update by Michael Hewson, Senior Market Analyst,
[10:08am] US equity markets paired back some of their recent runs as they closed out last week on a softer note.
However, with the bullish start to the European markets setting the tone for the new month, pre-market calls are for a return to the more optimistic mindset frequently associated with the US.
After seeing both China and the UK overshoot manufacturing expectations, this template looks like it will be replicated this afternoon by the US rather than the lacklustre Eurozone equivalent.
Ahead of the open we expect the Dow Jones to start 38 points higher.
Update by Alastair McCaig, Market Analyst,
[10:04am] Updated Dow Jones COT Report
The latest COT Report (Commitments of Traders) for the Dow Jones futures market has been released by the CFTC, please see our Dow Jones COT report below.
A spreads account would also let you speculate on short-term daily Dow Jones markets. Users should note that accounts are normally subject to suitability, credit and status checks.
Should your application be approved then you can log on and study the charts and the current prices. These are normally free. Having said that, you might get the occasional sales letter or email from the spread trading company.
Of course, if you do trade then, before starting, you should note that CFD trading and financial spread trading carry a high degree of risk to your funds and can result in losses that are greater than your initial investment.
Advanced Charts for the Dow Jones
Although charting software/packages can vary across the industry, to help your analysis of the Dow Jones, they often come with useful tools like:
Drawing features and options e.g. Trendlines, Fibonacci Arcs, Fans and Time Zones
Different display options e.g. candlestick charts and bar charts
A host of different time periods e.g. 1 minute, 3 minute, 5 minute, 15 minute, 1 hour, 1 day etc.
The Dow Jones Industrial Average, often referred to as the Dow, Dow 30 or Dow Jones, is one of the world's most well known markets.
The Dow represents a selection of thirty of the biggest American public companies. It's used to measure the performance of these corporations whilst also reflecting the state of the American economy and, to a degree, the world economy.
In spread betting and CFD trading, rather than being called the Dow, Dow Jones or Dow 30 it is often called 'Wall Street' or the 'US 30'.
Dow Jones Spread Betting: Firms with High Share Prices are the Most Important
If you want to profit from trading the FTSE 100, the biggest corporations are the most important. Because of the way the FTSE 100 index is weighted, movements in the share prices of the largest corporations affect the FTSE 100 index more than price movements in the shares of smaller companies.
However, the Dow Jones Industrial Average is not 'price weighted'. This means that a one point increase or decrease by any share in the index will have the same effect as a one point increase or decrease of any other share.
As of April 2012, share prices on the DJIA range from around $8-9 (Bank of America and Alcoa) to almost $210 (IBM).
So, a 10% shift in IBM's share price (around $21) would account for a large movement in the Dow Jones index (around 160 points).
However, a 10% shift in Bank of America's share price (around $0.90) would only lead to a very small change in the Dow Jones (around 7 points). This isn't because IBM is a bigger corporation, it is because IBM's share price is much higher.
The other high value shares to watch out for in the Dow Jones are, as of April 2012, Caterpillar, Chevron and McDonalds.
Dow Jones Stock Market Index: Different Trading Times
The Dow is based on Wall Street however, not all 30 companies that make up the DJIA are based on America's East coast.
So, when the Dow Jones opens for trading, the value is determined only by the relatively few companies that open first. The opening price on the Dow will therefore always be close to the previous day's closing price.
As a result, the Dow Jones will never accurately reflect the true opening prices of all its companies.
If you are looking to trade on the Dow Jones, you need to be very careful when you open your position. Whilst the FTSE 100 might 'hit the ground running' with all companies opening at the same time, the Dow Jones doesn't work in the same way. Investors should monitor opening and closing prices so they can be confident of opening a position at the right time.
Dow Jones Spread Betting: Know the Shares
One of the advantages of trading the Dow Jones is that there are only 30 corporations in the index. Therefore it's easier to keep an eye on each of the component companies and what's happening to their share price.
Some traders believe that it is good practice to have a number of shares that you regularly follow. The aim of this is to get to know these shares and become familiar with their price movements.
Keeping tabs on all FTSE 100 companies is tough, it's hard to know exactly what is happening to all the shares at any given time. However, watching 30 Dow Jones stocks is more manageable. You can get to know each company's typical share movements and that can help you forecast where the Dow Jones will head next.
Speculating on the stock market always comes with a degree of risk. However, if you would like to use a Demo Account, that allows you to practice spread betting on a wide range of markets, please see below for further details.
When you think about which investment option is right for you, don't forget that, in the UK, financial spread betting is currently tax free*.
If you are trying to find a low cost financial spread betting website then keep in mind that you can trade the Dow Jones without having to pay any commissions or brokers' fees through companies such as:
Each of the spread betting companies listed above offer a Test Account which lets users apply a range of trading orders, test new trading ideas and review stock market charts.
How to Spread Bet on the Dow Jones?
As with a wide variety of financial markets, investors can spread bet on indices, like the Dow Jones, to either rise or fall.
If you go to the Financial Spreads platform, you can see that they have priced the Dow Jones Rolling Daily market at 13343.0 - 13345.0. This means that an investor could put a spread bet on the Dow Jones index:
Moving above 13345.0, or
Moving below 13343.0
When you spread bet on the Dow Jones index you trade in £x per point, where a point is one point of the index itself. As a result, if you invested £4 per point and the Dow Jones moves 26 points then that would be a difference to your profit/loss of £104. £4 per point x 26 points = £104.
Rolling Daily Indices Markets
This is a Rolling Daily Market which means that there is no set settlement date for this market. You do not have to close your position, should it still be open at the end of the trading day, it simply rolls over to the next trading day.
If you do let your position roll over into the next day and are spread betting on the market to:
Go higher - then you are charged a small overnight financing fee, or
Go lower - then a small payment is normally credited to your account
Now, if you think about the spread of 13343.0 - 13345.0 and assume that:
You have analysed the indices markets, and
You think that the Dow Jones index will increase and move above 13345.0
Then you may go long of the market at 13345.0 and invest, for example, £5 per point.
Therefore, with this trade you make a profit of £5 for every point that the Dow Jones index moves higher than 13345.0. However, it also means you will lose £5 for every point that the Dow Jones market moves below 13345.0.
Considering this from another angle, if you were to buy a spread bet then your P&L is worked out by taking the difference between the final price of the market and the initial price you bought the spread at. You then multiply that price difference by the stake.
Therefore, if after a few days the US stock market moved higher then you might think about closing your trade and guaranteeing your profits.
Taking this a step further, if the stock market did go up then the spread might change to 13380.4 - 13382.4. You would close your spread bet by selling at 13380.4. As a result, with the same £5 stake your profit would be calculated as:
P&L = (Closing Price - Initial Price) x stake
P&L = (13380.4 - 13345.0) x £5 per point stake
P&L = 35.4 x £5 per point stake
P&L = £177.00 profit
Trading the American stock market is not simple. In the above example, you had bet that the US index would rise. Of course, the stock market can fall.
If, contrary to your expectations, the Dow Jones fell, then you might decide to close your trade to stop any further losses.
So if the spread pulled back to 13313.1 - 13315.1 you would close your position by selling at 13313.1. This would result in a loss of:
P&L = (Closing Price - Initial Price) x stake
P&L = (13313.1 - 13345.0) x £5 per point stake
P&L = -31.9 x £5 per point stake
P&L = -£159.50 loss
Note - Dow Jones Rolling Daily spread quoted as of 11-Sep-12.
How to Trade Dow Futures
Looking at a site like InterTrader, we can see they are currently offering the Dow Jones December Futures market at 13408 - 13414. This means an investor could speculate on the Dow Jones index:
Closing above 13414, or
Closing below 13408
On the expiry date for this 'December' market, 21-Dec-12.
As with the daily market above, you trade the Dow Futures in £x per point. So if your stake is £5 per point and the Dow moves 27 points then that would make a difference to your profits (or losses) of £135. £5 per point x 27 points = £135.
Dow Jones Futures Trading Example
If we take the above spread of 13408 - 13414 and make the assumptions that:
You have done your analysis of the American futures market, and
Your analysis suggests the US index will settle above 13414 by 21-Dec-12
Then you could decide to buy the market at 13414 and risk, for the sake of argument, £2 per point.
With this contract you make a gain of £2 for every point that the US index moves higher than 13414. Nevertheless, you will make a loss of £2 for every point that the Dow Jones market goes lower than 13414.
Put another way, with spread trading, your profits (or losses) are worked out by taking the difference between the closing price of the market and the price you bought the market at. You then multiply that price difference by the stake.
So, if on the expiry date, the Dow Jones closed at 13488, then:
Profit / loss = (Closing Value - Opening Value) x stake
Profit / loss = (13488 - 13414) x £2 per point stake
Profit / loss = 74 x £2 per point stake
Profit / loss = £148 profit
Of course trading the American stock market futures is rarely that straightforward. In the above example, you wanted the Dow to rise. Of course, the stock market index could fall.
If the futures had fallen and settled at 13334 on the expiry date, then you would end up losing this trade.
Profit / loss = (Closing Value - Opening Value) x stake
Profit / loss = (13334 - 13414) x £2 per point stake
Profit / loss = -80 x £2 per point stake
Profit / loss = -£160 loss
Note - Dow Jones December Futures market taken as of 27-Sep-12.
Risk Management: Spread Betting on the US Stock Market with a Stop Loss
You can put a limit on the size of your position to help reduce your potential losses without impacting your upside. You can also employ smaller stake sizes such as £1 per point or $1 per point.
Letís say you spread bet on the Dow to go up, with a £1 per point stake and attach a Stop Loss order to your trade. If the US stock market goes up by 120 points then you would make 120 points x £1 per point = £120.
You are also able to trade the markets in Euros and Dollars. If you want to trade in dollars then 120 points x $1 per point = $120.
Of course if the market went against you, dropping by say 90 points, then with a £1 stake you would lose 90 points x £1 per point = £90.
Obviously this would be a fairly poor start. However, with firms like Financial Spreads you can add a Stop Loss at let's say, 30 points.
If you were trading the Dow this would mean that your position would be closed if the US index moved against you by 30 points. Therefore, instead of losing £90, you'd only lose 30 points x £1 per point = £30.
However, assuming you correctly predicted the direction of the market, your upside would still be £120.
Note that Stop Losses are not guaranteed, if a market slips then your Stop Loss is closed out at the next traded price. If you donít want that risk then you can use a Guaranteed Stop Loss, these are guaranteed to close your trade even if the underlying market slips (gaps).
A number of firms like Financial Spreads, InterTrader and Capital Spreads automatically apply a Stop Loss to every trade. You can upgrade to a Guaranteed Stop Loss but that normally comes at a small premium (normally a wider spread).
'Dow Jones Spread Betting' edited by Jacob Wood, updated 03-Mar-15
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Dow Jones Spread Betting
Dow Jones financial spread betting guide with a price comparison and daily analysis. Plus live Dow Jones charts & prices, where to spread bet on the stock market index commission-free and... » read from top.