Financial market

A financial market is a market in which people and entities can trade financial securities, commodities, and other fungible items of value at low transaction costs and at prices that reflect supply and demand. Securities include stocks and bonds, and commodities include precious metals or agricultural goods.

There are both general markets (where many commodities are traded) and specialized markets (where only one commodity is traded). Markets work by placing many interested buyers and sellers, including households, firms, and government agences, in one "place", thus making it easier for them to find each other. An economy which relies primarily on interactions between buyers and sellers to allocate resources is known as a market economy in contrast either to a command economy or to a non-market economy such as a gift economy.

In finance, financial markets facilitate:

    The raising of capital (in the capital markets)
    The transfer of risk (in the derivatives markets)
    Price discovery
    Global transactions with integration of financial markets
    The transfer of liquidity (in the money markets)
    International trade (in the currency markets)

– and are used to match those who want capital to those who have it.

Typically a borrower issues a receipt to the lender promising to pay back the capital. These receipts are securities which may be freely bought or sold. In return for lending money to the borrower, the lender will expect some compensation in the form of interest or dividends. This return on investment is a necessary part of markets to ensure that funds are supplied to them

In mathematical finance, the concept continuous-time Brownian motion stochastic process is sometimes used as a model.
Contents
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    1 Definition
    2 Types of financial markets
    3 Raising capital
        3.1 Lenders
            3.1.1 Individuals & Doubles
            3.1.2 Companies
        3.2 Borrowers
    4 Derivative products
    5 Currency markets
    6 Analysis of financial markets
    7 Financial market slang
    8 See also
    9 Notes
    10 References
    11 External links

Dow Jones Industrustrials - At Key Resistance

We are at key levels in several of the major indices so I thought it might be a good idea to post a few comments regarding what I am seeing in the Dow Jones Industrials right now.
Lets start with the big picture...   Above we have a weekly chart of the ETF for the Dow Jones Industrials (DIA). As you can see this market is testing major resistance which was established last spring.


Now lets

Stocks Explode Higher As Small Caps Lead The Way

Stocks rallied strongly today with every major index sharply higher. Over the past 2 weeks the Russell2000 (small caps) have been leading the stock market higher as can been seen in the rising relative strength line in the lower panel.
Stocks usually put in a significant low around October and rally into the end of the year. This is a strong seasonal tendency that happens more often than not. I

Gold Surges Higher

The gold market rallied sharply today closing above the recent trading range. The ETF GLD which tracks gold showed a nice increase in volume confirming the breakout. You'll notice that the recent consolidation developed right at key support (green line)  which tells me that the bulls are once again in control of this market.
If you look at the commitment of traders data (not shown) you will see

Euro - Turns Lower

Last week I wrote about the heavy resistance area the Euro was testing. This resistant zone is a combination of Fibonacci retracements as well as a support low from a few months ago. As you can see in the above chart, the Euro put in a reversal bar today suggesting that lower prices are likely. A move back above today;s high would negate the bearish outlook.

AAPL ( Apple Inc) - Watch This Stock Tomorrow

Apple Inc (AAPL) is one of my favorite stocks to trade mainly because it's so liquid and it is a leader of the NASDAQ due to its heavy weighting within the index. The reason I will be watching this stock tomorrow is because we now have an inside day. An inside day is simply a day that has a lower high and higher low compared to the previous day.
What I like about inside days is that they

British Pound - Tests Resistance

Above is a daily chart of the British Pound vs The U.S. Dollar (GBP/USD). This currency's technical picture is very similar to what the Euro is doing right now. The British Pound is at the .382% retracement from points A to B. This Fibonacci number also coincides with major resistance. This is a powerful confluence of technical resistance so be on alert for possible signs of weakness here.