In the US, the Dow Jones Index is one of the major indicators of market movements. The other two major market indexes are the Nasdaq and the S&P 500. Collectively, they are known as the Security Market Indicator Series (SMIS). It is a price weighted average index of 30 major companies. The Dow was founded in 1896 by Charles Dow, and at that time, represented the dollar average of twelve stocks. Since that time to present, it now has thirty components and is thus referred to as the Dow 30. In the old days, investors did not buy stocks because the stock market was not held in high regard. Instead, they mainly invested in bonds.

They did not have the technical indicators or different theories we have today, and they did not have any clear idea about how the market was moving, whether it was up, down or sideways. Because of this, they could not forecast trends. This would have made it harder to profit from stock picks. It is very important to have stock charts, and to be able to perform technical analysis on any stocks to determine where the price may reverse. Without this kind of information, you could only hope the stock would rise because you heard from the company owner that they had a good year. Thanks to the creation of the Dow Jones index, all that changed, and with it came a completely new way of forecasting.