Stock market indicators are statistics that investors watch and analyze in order to understand where the market is at and where it is going. There are a myriad of indicators that an investor can use to help gauge the market and determine an optimal portfolio.
Sentiment indicators are the group of stock market indicators that include how investors are “feeling” about the market. Common sentiment indicators are the put/call ratio and the volatility index – VIX. Economic indicators like CPI and industrial production can aid in indicating what part of the business cycle the economy is in and can provide an indication as to the desirability of stocks going forward. There are also monetary stock market indicators that include the money supply and yield curves (i.e. 10-year vs. 3-month Treasuries.) Investors also follow technical Indicators (i.e. moving averages, breadth, momentum, etc.) based on the assumption is that price movement reflects all the information available to investors. Investors also follow valuation indicators (i.e. PE ratio, dividend yield, etc.) in an effort to determine if the market is relatively expensive or cheap.
A great source of stock market indicators is at Chart of the Day.
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