Technical Analysis Dow Jones Index Futures
Dow Jones Index on the Stock ExchangeThe Dow Jones Industrial Average Index (^ DJI) is one of the oldest stock indices. It is a kind of barometer that determines the state of the "blue chips" of the American stock market.
The Dow Jones Industrial Average (DJIA) is one of the major American stock indices. For brevity, it is simply referred to as the Dow Jones Index and is the basis of a whole family of indexes.
It is published by Dow Jones & Company, Inc., a publishing and financial analytics company.
Now the Dow Jones is an indicator of the state of the US stock market, including the shares of the 30 largest companies in the country, and its name remains only as a tribute to history, since many of the modern issuers in it have long ceased to belong to the industrial sector.
Dow Jones futures are traded on the Chicago Mercantile Exchange (CME) under the ticker DJI.
Dow Jones Index HistoryThe prototype of the index was created in 1884. Then Charles Dow and Edward Jones, economic observers of the Wall Street Journal, created an indicator for assessing the state of the American transport infrastructure, it was called the Dow Jones Transportation Average. It includes shares of 11 companies. The cost was determined not in dollars, at the start it was 50 points. At this time, it was calculated as the arithmetic average of the stock prices of twelve American industrial companies.
In 1916, the number of issuers in the index increased to 20, and in 1928 - to 30. So many of them remain to this day, however, the method of calculation has been changed - now, instead of the number of companies, the sum of stock prices in the index is divided by a special divisor, which changes in the event of a split or consolidation of securities in the calculation base. This was done in order to maintain the comparability of its values over the entire period of its existence.
There are three types of Dow Jones index futures: a mini contract with the ticker YM, a standard contract labeled ZD, and a large contract with the ticker DD. Their size is equal to the value of the underlying index multiplied by $ 5, $ 10 and $ 25, respectively.
Now the Dow Jones index includes securities of the 30 largest companies, including:
3M Co. (MMM), American Express Company (AXP), AT&T, Inc. (T), Boeing Co. (BA), Caterpillar Inc. (CAT), Chevron Corp. (CVX), Cisco Systems, Inc. (CSCO), EI DuPont de Nemours & Co. (DD), Exxon Mobil Corp. (XOM), General Electric Co. (GE), Goldman Sachs Group Inc. (GS), Intel Corporation (INTC), International Business Machines Corp. (IBM), Johnson & Johnson (JNJ), JPMorgan Chase & Co. (JPM), McDonald's Corp. (MCD), Merck & Co. Inc. (MRK), Microsoft Corporation (MSFT), Nike Inc. (NKE), Pfizer Inc. (PFE), Procter & Gamble Co. (PG), The Coca-Cola Company (KO), The Home Depot, Inc. (HD), Travelers Cos Inc (TRV), United Technologies Corp. (UTX), Unitedhealth Group, Inc. (UNH), Verizon Communications Inc. (VZ), Visa Inc (V), Wal-Mart Stores Inc. (WMT), Walt Disney Co. (DIS).
The structure of the Dow Jones 30 changes from time to time as the list of the largest US companies changes.
As for volatility, in general it grows along with quotes. If in 2013 the daily price movement averaged up to 300 points, then in 2019 it rarely dropped below 500 points, and in periods of increased volatility it went beyond 1000 points.
The industrial index is the main one in the Dow Jones family, but besides it there are several other varieties, including:
Dow Jones Industrial Average Yield Weighted - similar to the main index, weighted by the dividend yield of its constituent securities.
The Dow Jones Transportation Average (DJT) - is an index of 20 companies in the transportation industry.
The Dow Jones Composite Average (DJCA) - is a general index consisting of 65 stocks and combining the three above.
Dow Jones U.S. The Financials Index - is an index of American corporations in the finance industry.
Dow Jones U.S. The Health Care Index - is an index of stocks of companies in the US healthcare industry.
Dow Jones Global Titans 50 - is a global index that includes 50 shares of the world's largest and most famous blue chips, traded on NYSE, NASDAQ, LSE, TSE.
Dow Jones Turkey Titans 20 - is a local index calculated on the basis of the securities of the 20 largest Turkish companies.
Dow Jones Italy Titans 30 - is an index of 30 major issuers in Italy.
The Global Dow USD (GDOW) - it includes 150 blue chips from around the world.
The Dow Jones index family is very large and includes both US industry indices and local indices of other countries.