The above two charts are the intraday charts for the date 24th May 2010 of Dow Jones ( left one ) and Nifty ( Right One ).Sometimes it is difficult to tell who is following whom?. Is it Nifty that tries to preemt whats going to happen at the Dow Jones? or Is it DowJones that sometimes forms the exactly same pattern that Nifty made during its trading hours? The corelation sometimes gets so high ( 90 % ) that the charts appear to be manipulated or hand made/ art work by a III class student but I hope they are not. We all know that in the morning the first question a Day Trader/ Relationship Manager asks to his/her colleague is " Abe Dow Kal Raat Kaise Band Hua / How did the Dow Jones close yesterday?? ", sometimes this question has more relevance than " How are you ? ". The corelation is such that the most of times almost all Asian Markets open in the same territory ( Green/ Red ) where Dow Jones closed. In the above 2 charts, the similarities are 1) Pattern of whole trading day is same 2) Exactly 1 pm selling starts 3) Pattern of fall in both markets is same 4) Top is made between 12-1pm. The only difference is that Nifty spent most of the trading day above the previous closing price ( in the green and at the end erased almost all the gains) whereas Dow Jones spent most of the day below the previous closing price ( in the red and at the end the fall exceeded to triple digit fall ). This is just an observation and nothing is meant to be proved here.
Have a nice trading day
Regards
Ankit
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