Q:

How do stockbrokers use the S&P 500 charts going back 20 years?

A:

Quick Answer

Stockbrokers use charts of the S&P 500 dating back 20 years to track the financial performance of the general economy, as noted by About Money. The S&P 500 is representative of approximately 70 percent of the whole economy, as of March 2015.

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Full Answer

A historical stock chart offers price and period. The chart plots the change in price over a period of time. Experts use historical stock chart information to anticipate future prices, as noted by Chron Small Business. However, there is no known technique or formula that is proven to accurately predict future stock prices.

When analyzing historical charts, investors look at intraday trends and value areas. These metrics are used to help assess price to determine if a stock is overvalued or undervalued. Advanced stock charting software can also capture market information and provide advanced data to determine when to buy or sell shares.

StockCharts offers free historical charts for major market indexes, as listed on the organization's official website. The three major market indexes are the Dow Jones, the NASDAQ and the S&P 500. These indexes all consist of different companies and fluctuate on a daily basis based on current market conditions. Other smaller indexes are used to assess certain sectors of the economy, such as technology and finance.

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