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Dow Jones Technical Analysis – Learning From Industry Leaders

Even new investors know that constantly tracking and monitoring the stocks in your inventory is one of the only ways that you can maintain control over your portfolio and stay up to date on market changes that could be big opportunities for profit. One of the most widely respected and reported stock market monitoring indexes is the Dow Jones Industrial Average, often simply referred to as ‘the Dow.’ For many investors in the U.S., analyzing the Dow is a way to keep their finger on the pulse of the health of the American market in general, as it is made up of only a handful of the strongest national trading companies. Being able to conduct Dow Jones technical analysis helps investors build a quality portfolio by giving them something to pattern it against.

Before you can really start practicing Dow Jones technical analysis, it’s important to spend some time getting to know the history of the Dow, and how it has been used over the year to predict and monitor the health of the stock market in the United States. The Dow Jones Industrial Average was founded by Charles Dow in the late 1880s, and at that point it only consisted of a couple of capitalized companies and twelve capitalized railroad companies. Even though the market has expanded greatly since then, the Dow still only tracks thirty different stocks. This is appropriate because it is meant only to monitor economic vitality by tracking companies considered to be essential to economic stability.

Although it’s possible to be a moderately successful investor without paying attention to Dow Jones technical analysis, it’s always a good idea for traders to have a sense of what’s going on in the larger market, and the Dow provides the perfect platform for that. If you have doubts about whether or not a indexing service that tracks only 30 public entities can be of use to casual investors, it’s important to remember that the Dow is compared with any of the more comprehensive U.S. indexes, like the Wilshire 5000, it will be obvious that the two have taken very similar paths.

By using Dow Jones technical analysis investors can determine the smartest ways to invest, both companies on the Dow index, as well as companies traded on other boards. Tracking stock price movements on the Dow is considered to be very important to technical analysis, as this information can then be aggregated and applied to holdings on other indexes. If you’re ever interested in general synopsis of the, the DJIA is where you want to look.

Understanding the Importance of Surface Analysis

Analyzing how the surface of a material will behave is very important as surfaces of various materials are totally interwoven into many aspects of our daily lives. Based on the behavior of the surface, different materials can be used for different applications and products. So it is important to have detailed information about material surfaces. This information can be gathered using the technique of surface analysis.

In order to understand the properties and reactivity of any surface it is necessary to understand its physical topography, chemical composition, atomic and chemical structure, the electronic state, and the manner in which the surface molecules bond with each other. Different methods of surface analysis have been developed to analyze and understand these different characteristics of surfaces.

While it is not necessary to understand all of these characteristics for individual applications, having a basic idea about them always helps improve the quality of products and applications. In order to get specific information about the surface, it is necessary to somehow interfere with its state in some manner. This could be in the form of bombarding the surface with electrons, photons or ions.

While the bombardment is not significant, it does have an effect on the physical and chemical properties of the surface. However, by controlling the environment in which this bombardment is carried out, it is possible to control the changes that take place in the surface. This environment is best created through the use of modern analysis devices known as surface analyzers. Another name given to these analyzers is profilometers as they help create a complete profile of the surface of any material.

There are many different types of surface analyzers available in the market. Using different surface analysis techniques, these analyzers help in the detailing and analyses of different characteristics of material surfaces. While there are as many as 50 different surface analysis techniques currently in existence, the major methods include:

  • Auger Electron Spectroscopy
  • Atomic Force Microscopy
  • Auger Photoelectron Coincidence Spectroscopy
  • Appearance Potential Spectroscopy
  • Angle Resolved Spectroscopy
  • Attenuated Total Reflection
  • Chemical Force Microscopy
  • Disappearance Potential Spectroscopy
  • Energy Dispersive X-ray Analysis
  • Electron Energy Loss Spectroscopy
  • Electron Probe Micro-analysis
  • Field Emission and Field Ion Microscopy and
  • High Energy Ion Scattering

Most surface analyzers and profilometers are based on one of these major techniques.

Majority of surface analyzers consist of a stylus that has a sensor at its tip. This sensor picks up surface irregularities and characteristics and converts these into user readable format. In the simplest of terms, a surface analyzer is a device that determines the characteristics of a surface by analyzing and amplifying the voltage changes that take place when a sensitized stylus is moved over it. The voltage generated from such movement is fed into an indicator that magnifies it up to 50,000 times to create a precise and detailed map of the surface under analysis.

As new industrial applications have been discovered that require surface analysis, the complexity and effectiveness of surface analyzers has also undergone many changes and developments. Today, surface analyzers are used in almost every major industrial and manufacturing process including nanotechnology, biotechnology, polymers, paints, metal coating, cements, pharmaceuticals, agriculture, aerosols, pigments, and plastics, to name a few.

Only through in-depth analysis of the chemical and atomic composition of material surfaces, manufacturers are better able to determine the quality and effectiveness of the end product. So the above techniques and devices play invaluable roles in providing us with the high quality products that we use in our day-to-day lives today.

Supply Market Analysis – Why Do We Need Market Intelligence?

Why do we bother to gather market intelligence on the strategic commodities we are sourcing? The answer is that if we don’t we may be exposed to unnecessary supplier risk and any competitive advantage we thought we had may be lost. Supplier risk can be present anywhere, anytime and with any supplier.

Supply Market Analysis vs. Market Intelligence

Supply market intelligence is a current buzz-phrase currently gaining rapid exposure. It is essentially an upgrade of supply market analysis and can be defined as the process of gathering, filtering, distilling and presenting information relevant to a company’s supply markets. The specific purpose is to support accurate and confident decision making in the procurement process. A properly executed and insightful supply market study requires that significant and disparate amounts of research materials be collected through primary and secondary research.

Traditionally, supply market analysis has included developing a commodity profile, examining cost structures, researching suppliers, and identifying key market indicators. Being able to able to assemble a supply market analysis for a given commodity is a skill that is essential for every supply chain professional to master

Primary and secondary research

Primary research is information gathered through interactions with other people typically through meetings, one-on-one structured interviews, focus groups, and surveys. Primary research with current and prospective vendors is often more valuable and insightful than secondary research. The deluge of information available on the Internet, both reliable and suspect, can be accessed equally by billions of users. Primary research is an essential element towards creating a competitive advantage.

This is the fun bit. Secondary research is information collected from existing literature, publications, broadcast media, and other non-human sources. This is generally easier to gather than primary and is often valuable in relation to the effort expended. Whether you are studying the market outlook for male personal hygiene products in Southern Africa for the next five years or an in-depth analysis of future capital flows and investment trends in hospital construction, it is all “out there”. A recent report on the South African economic environment predicts that the pharmaceutical industry will grow much faster than other sectors due to a strong continuing demand for primary healthcare level drugs, such as generics, antibiotics and over-the-counter remedies.

Intelligent steps to take towards really knowing your commodity

  • Develop the Commodity Profile

Find out the international product classifications and document the commodity definition. Consult widely and get a clear understanding of the important technical and quality issues.

  • Determine the Cost Structure.

Over and above the usual adding up of raw material costs, labour, transport, energy, overheads etc, you can be more innovative. Listed companies are required to publish financial statements and do presentations on their business results. Scour this information for clues to their cost profiles.

  • Research all Suppliers

This requires focus and effort and is an on-going process. Establish if the global market is fragmented or consolidated, where the low-cost suppliers are, possible new supply channels and any pending mergers or buy-outs. This is an area is where you may need help from the specialist organizations that provide news and intelligence services, especially where they target unlisted companies. Customized dashboards are available that are designed especially to track activity within your commodity. But at a price!

  • Identify Key Market Indicators.

The good news is that most global and regional market indicators are frequent, reliable and free. Economic and indicators track high level commodity prices, production rates, inventories, GDP and employment statistics. You can even set up alerts so that you don’t miss any key events or developments.

Should your organization be kind enough to provide you with analyst support or if you have excess time on your hands, you can delve into technical and detailed analyses for important commodities using SWOT analysis, Porter’s five forces and PEST. PEST stands for “Political, Economic, Social, and Technological analysis” and you can even upgrade it to PESTLE if you add Legal and Environmental impacts.

Whether you are based in Luanda, Lesotho or Lilongwe, you can have access to the same market information as the rest of the world. The difference is that you may not have the opportunity or the financial resources to source from outside Africa which limits your options. South Africa and Nigeria are the most developed markets and primary sources of supply for buyers in Southern Africa.

Supply market information challenges will always be with us

Identifying high risk suppliers is one of the major reasons why we undertake the laborious research into our supply markets. Risks can be mitigated to some extent through tracking and managing supplier performance issues and monitoring the changing financial status of key suppliers but this is not foolproof. It is necessary to have a Plan B ready where you have already identified alternative suppliers to replace or supplement existing suppliers. Avoidance of supply chain disruptions due to supplier failure is vital for business continuity.

Information overload is trap that it is easy to fall into, as is analysis-paralysis. Managing key suppliers by exception allows you to use your limited resources wisely. Continuous monitoring of high impact suppliers through the use of scorecards, graphs and charts helps ensure that you can store and share current information and provides an early warning system for senior management.

Sourcing managers, especially in Southern Africa, are doubly challenged as they are required to have a diverse supplier base. This can involve a time-consuming supplier qualification and record keeping process. Government regulations and economic development initiatives which are designed to offer supply opportunities to micro-, small- and women owned businesses need to be followed. In most African countries, a percentage of local content is an important requirement. All of these issues add complexity to the maintaining of a good supplier intelligence database.

Competitive advantage through knowledge and analysis

One’s analysis efforts should be focused on heavily concentrated markets where there a few large suppliers and also on highly fragmented markets where smaller suppliers can cause supply interruptions due to financial instability. Tracking of key market indicators can provide insights in supplier cost structures which helps determine if you are achieving the best possible deal.

An in-depth knowledge of the supply market dynamics in a commodity can reduce risk. By developing a comprehensive understanding of the number, type and structure of suppliers you can keep your options open and lower the risk of supply interruption.

Used within a strategic sourcing framework, a procurement person’s strong primary research skills and the ability to track a commodity can deliver competitive advantage. If you are naturally inquisitive and like to follow trends, none of this will even feel like work.