dc2000
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For the moment there is little investment going in over in the US the UK is fairing slightly better which is why the FTSE is currently leading the DOW and why warren buffett was able to get a very good deal recently with bank of america
barjon
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FTSE currently leading the DOW? I don't think so, DC.
On the basis that 2 DOW points = 1 FTSE point here's a chart showing the cumulative difference between actual FTSE and where it should have been had it kept pace with DOW. You'll see that FTSE spent the first four months relatively strong against the DOW and the second four months relatively weak - much weaker than the earlier strength.
At its worst FTSE was 500 points down on where it would have been had it kept pace with the DOW and that was only 3 days ago. Since then it has had a few strong days and is currently 370 odd points down. ie: at today's UK close FTSE should be standing at around 5660 had it kept pace with DOW from the beginning of the year.
jon
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BeginnerJoe
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The FTSE can be best described as the bi*ch of the DOW. She goes PMT on the slightest upset and quite unpredictable and often hysterical.
Forget about watching one index and trading another. It's not that simple, why don't you just watch some charts and see for yourself?
barjon
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thought you'd be reading between the lines, redt.Yes, FTSE follows the DOW most of the time, sometimes with reluctance and sometimes with over enthusiasm. No, it's not because of US traders buying or selling UK shares.
The futures give you the best clue. If traders are taking DOW/S&P futures down then traders of UK FTSE futures follow the downward lead. This, in turn, leads to proportionate selling of shares that make up the FTSE100 and the index drops in parallel with the futures. Not as straightforward as that, of course, because what happens with the futures is also influenced by what's happening with individual shares - the spurt in the US because of the sudden 8% rise in Bank of America courtesy of Warren Buffet is an example.
jon
BeginnerJoe
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cheers jon
So, are you now in position to make a killing ?
FarQuinnell
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this really is an impossible question to answer, it depends on what it driving the move - and because there are so many degrees of freedom behind that, pigeon-holing indices into leading or lagging is futile.
flemming
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Typically the FTSE will generally trade off what the US markets did on the day before. However, when the markets are both trading at the same time for the first 3 hours of the US session, you will see a pretty high level of correlation. After the FTSE closes, you will generally see the FTSE trade up or down whatever the dow managed to gain/lose after that point. Of course there are alot of moving pieces and with the european situation taking center stage this is almost opposite right now. However, over your trading career you will likely see the dow lead the FTSE
the FTSE 100 is 77% of its value of the highs in 2007 and the Dow is 79% of it's value, so to me the ftse needs to be 5300 to be inline with the Dow.
And to answer your question. The DOW follows the FTSE which follows the NIKKEI which follows the DOW, which follows the FTSE.
