Daily Stock Market Equity and Options Trading Commentary

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Monday, April 20, 2009

Understanding the Dow Jones Industrial Average Divisor Part 2

Because I have a finance/ stock market blog I would like to write a quick post on calculating the Dow Jones Industrial Average. This moves very differently compared to the other indices. For those who are interested I have created a spreadsheet that calculates the Dow daily. My Dow divisor spreadsheet shows all 30 stocks in the Dow, what the change was for the day broken down by each stock (refreshed automatically and then every 5 minutes- refresh manually by clicking "data" and then "refresh"), what each stock in the Dow 30 finished the day at, and what would happen to the Dow Index if any particular stock went to zero. Out of curiosity I also created two columns that calculate the Dow Jones Industrial Average if all of the 30 stocks in the index were simultaneously at their highs or lows (unlikely to happen but you never know with this volatile market!). To download the spreadsheet for Excel versions 2003 or older Click here, to download the Excel spreadsheet for Excel 2007 click here (recommended).

***NOTE*** An error may occur if a value for a Dow component finishes the day unchanged. You will see an "unch" in the box, simply place a zero (0) in the box and it should fix the error.

Hope this will help explain the Dow Jones Industrial Average Divisor better. The current Dow Divisor is .125552709 and this spreadsheet will need to be updated when it changes.

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Forest said...

Thanks for all your help, and for your fantastic blog. I am looking forward to reading your e-book!

Is there any book/resource you would recommend for learning to read technical charts?


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