Stock

[ahipes]

I have been trying to do research on this but its to confusing so I would like some help in simple terms please. What does it mean when the dollar/ gold stock goes down? There is an app for my phone where It shows stuff like virus outbreaks,earthquake, wars/ terrorism, near earth stuff and then there is the $/gold stock reports. How or what does it mean when its bearish or bullish. And what determines it?

 

[DrHenley]

Let's start with Gold. Gold is sold on the markets a number of different ways. The most popular way to buy gold on the stock market is through an instrument called an Exchange Traded Fund or ETF. What you do is buy "shares" of the ETF. The shares are approximately the value of 1/10 ounce of gold, somewhat less due to the overhead involved. The ETFs track the price of physical gold closely. Daily fluctuations may look different than the gold spot price, but longer term trends track almost exactly with physical gold.

The most popular gold ETF goes by the ticker symbol GLD. Another one that I like goes by the ticker symbol SGOL. In the prospectus, SGOL is forbidden from leasing out the gold backing the shares. GLD is not.

Another popular way to buy "gold" on the stock market is to buy gold mining ETFs. The most popular is ticker symbol GDX.

The Dollar Index (USDX) is the value of the dollar measured against a "basket" of foreign currency.

• Euro (EUR), 57.6% weight
• Japanese yen (JPY) 13.6% weight
• Pound sterling (GBP), 11.9% weight
• Canadian dollar (CAD), 9.1% weight
• Swedish krona (SEK), 4.2% weight
• Swiss franc (CHF) 3.6% weight

DXY is an ETF that represents the Dollar Index. To buy "The Dollar" on the stock market, you buy ticker symbol DXY.

Bear markets and Bull markets are measured on three different timescales:

Secondary trend is measured in weeks or months
Primary trend is measured in years
Secular trends, last 5 to 25 years.

A down trend is a bear market, an up trend is a bull market. Bulls buy stocks expecting the price to rise, and sell at a higher price. To me it is obscene, but you can actually make a ton of money on a falling stock market. Bears do this by borrowing stocks and then selling the borrowed stocks, expecting the market to fall, so that they can buy them back, return them at a lower price, and then keep the change.

You can have bear secondary trends within bull primary trends, bull primary trends within bear secular trends, and so forth. A bull secular trend consists of a number of bull primary trends followed by shorter primary bear trends. This is the zig-zag pattern you see in stock histories. The system is almost always unstable to a degree, overshooting the highs and undershooting the lows, followed by corrections.