Hello everyone, and welcome to Schwab Coaching. My name is Cameron May, I'm a senior manager here at Schwab. And this is getting started with Thinkorswim, and with the markets moving around like they have been over the last few months. I thought, you know, it would be good to talk about just tracking market developments on Thinkorswim. We're going to be talking about five tools for tracking market indices and the sectors on Thinkorswim. Thinkorswim should be great for just about anyone who's using the Thinkorswim platform for the administration of a self-directed portfolio. Before we get into the particulars of today's discussion, let me say hello to everybody that's already chatting in. Hello there, Roger, Life in the Fast Lane, Larry, Stephen, Speak Truth, Eva, Trey, Lawrence, everybody else. Thanks for joining us week after week.
And if you happen to be here for the very first time, I want to welcome you as well. And if you're watching on the YouTube archive after the fact, enjoy the presentation. But be aware that you're invited to join us in a live discussion. This one kicks off at three o'clock Eastern time on Mondays, and it typically runs about 25 minutes. So you don't want to be late. And finally, as a heads up, my very good friend, Barb Armstrong is hanging out in the chats. Barb's going to be addressing any questions that I can't get to just during the natural flow of the presentation. As long as those questions are on topic, Barb's there to pick up the slack. But thanks for being there, Barb. Barb and I would like to issue an invitation to you.
If you're not following us on the platform known as X, please do that. It doesn't cost anything. It's the best place to connect with your favorite presenters in between the webcast. So you can find Barb. You can find me on X at Barb Armstrong CS. You can find me there at Cameron May CS. All right. So let's get into this discussion. But as we do that, first thing, of course, we need to do is pause to consider the risks associated with investing and trading. They are real. So bear this important information in mind. The information here is for general informational purposes only. It should not be considered an individualized recommendation or endorsement of any particular security, chart pattern, or investment strategy.
Schwab does not recommend the use of technical analysis as a sole means of Investing involves investment research and investing involves risks, including the loss of principle. Okay. So agenda for the day is very simple. We want to look at some tools that are available on thinkorswim for tracking new developments in market indices and in, in sectors. Okay. So let's go right to thinkorswim. And right now we're just looking at a chart of, of Apple, but let's suppose we're a new, a new user of thinkorswim. We want to see what's going on with the big market. What the big market indices, the S& P 500, the Dow, the NASDAQ, the Russell, how do we find those? And what might a trader look for as they're gauging new market developments?
Well, if we happen to know the symbols, we can just type those up here in the upper left-hand corner. So it's convenient. If one knows, for example, that the chart symbol for the S and P 500 is SPX. But another thing that we want to also be aware of is that if we don't know the symbol, thinkorswim has actually created a very convenient list of the, of the major indices, and even some of those that are maybe less commonly used right here on a pop-up that can be accessed by clicking on the little drop-down just to the right of the symbol box. Okay. So if we don't know the symbol, we can just click in, click on little drop-down, click on the indices tab.
And if we scroll straight to the top, we'll see, Hey, here's the NASDAQ composite. And hopefully it shows us that symbol. So we can make a note for next time. Dollar sign COMP is the symbol. For NASDAQ composite, there's the Dow Jones industrial average. So I could click on the NASDAQ composite and load that chart. I could pop back up here and go to the Dow Jones industrial average. Or if we scroll down a little bit further in that list, we can find the S& P 500 here. Russell to 2000 there. So how about we just bring up the S& P 500 and yes, just a chart can be that first tool that some traders will use for keeping their fingers on the pulse of new money.
So let's go ahead and look at some of the new market developments in these major indices. So for some, they may bring up a chart and they'll, they'll apply technical analysis techniques, such as trend identification, or looking for price levels, support and resistance levels. Where are the price floors and where it might be the price ceilings? So for those who just use a price chart, just knowing that little navigational tip to find the index that one is looking for can be useful. Once we're looking at price, how might they identify a trend? Well, they might, they might look for the little cycles that an index will tend to go through. Occasionally we'll get an extended run as we did here on the S& P 500.
Boy, this one lasted all the way from late October until we topped out here in the first part of April. That's a long run. More typically though, though an index and even individual stocks will tend to move in six-ish to eight-ish week cycles. Now, sometimes we know those. Some of those cycles can be longer, some can be shorter, but for some, they look at the highs and the lows within those cycles to gauge the overall trend of, of an index and therefore through extrapolation, the stock market as a whole. Okay. Another thing is to look at recent price levels. What are recent lows? Like recently we've dipped as low as about 51. 20 on the S& P 500. Or recent highs. Or possible barriers for advancement on prices or supportive levels if we get price retracements.
So all of those sorts of techniques can just be applied by using a basic price chart on thinkorswim. That's tool number one. That's an easy one. However, for others, they prefer a little bit more, a little bit more technical approach, maybe a little bit more automated approach than just wanting to apply one's own discretion to a chart. And so a second tool that might be used by some traders is to apply a moving average to a chart. So if we're looking at, and let's, let's, let's switch again, just so we can get again familiar with the navigation. We could type in our symbol here. Dollar sign C Y M P for the NASDAQ composite. Typically when somebody says the NASDAQ, this is what they're referring to. Or we could use the little menu here.
And find the NASDAQ composite right at the very top of that indices tab. Okay. In either case, we wind up with this chart and let's apply our simple moving average tool. So I'm going to go up to our edit studies icon. This is where we can, we can add technical tools or technical indicators to this chart. We refer to them commonly as studies or, or indicators. But the one I'm going to illustrate today, it's called a simple moving average. Let's select simple. Moving average on our chart from our list, our alphabetized list of potential indicators. Let's add that to our chart. And I do want to customize this to some extent, generally, you know, if we're talking about trading within a portfolio, then we might be looking at shorter term prime timeframes, investing within a, in a portfolio, maybe longer term timeframes.
Let's say we're looking at kind of a mix for both. Maybe our self-directed hypothetical investor has a little bit of both going. On, well, maybe they're looking at, generally speaking, some are longer-ish term trends on the, on major indices. Okay. Well, by default, this simple moving average is going to just use nine periods of data. We're looking at a daily chart. So that would be nine days, pretty short period. Let's extend that out to, in this case, I'm going to say a hundred. That's basically five months. There are. Typically around 20-ish calendar or pardon me, trading days in, in a month, you know, you actually weekends and holidays. So that's about five months worth of data. And let's use that for our indicator. I'm going to click. Okay. And click apply and click.
Okay. Again. And so what we're left with here is this line that's moving through our chart. That's basically, this is to summarize what this is telling us right now. It has a value of 16,954. This is telling us that over the last 100 trading days, about the last five months, the average closing value of the NASDAQ has been 16,954. And then a, a trader who's keeping their eye on, let's say significant developments on an index might look to see, first of all, is price above or below average for the selected timeframe. But possibly more importantly. Which direction is it? Is that average, um, closing value going over time, if it continues to rise for some investors that may have some potentially significant insights into, um, into the index.
So for example, the NASDAQ actually had slipped all the way down into correction territory right here over about a three, four week period. However, you'll notice that it's average price or it's average closing value. Over a five month period was still rising. So this might've been a comparative blip on the radar, even though it was still kind of painful for some bulls. This may be an indication that the bullishness of the market hasn't quite turned just yet. Okay, I actually got a question in the chats here, um, about a bear trap. Maybe this has proven to be a bear trap for, um, NASDAQ participants at the moment and for other major indices, bear trap is just one of them. But that's not always the case.
You know, if you think a stock might fail in this 50, 60, 50, 50 year sharp high, we're thinking that this should be, this should happen more and more often, but that's actually not really quite right. But we're, we've kind of just finally since we've lost the buyers by 50%. What we can say is, well, think about the, the town Camiola, uh, which is a centre in North Africa or South Africa, uh, under approximately a goddamn heap of shares. Well, people have more heads than they don't, at all. Things will continue to go on into, or some more thoughts over those markets. Well, this simple moving average started to roll over and start to head down, maybe for those traders who are looking for signs of more significant bearishness developing, that could be one of those signs.
Okay, so that's another tool that might be used on thinkorswim. And I wanted to make sure that we go in on an introductory level so that everybody can follow and everybody is right in step with us as we continue. But one thing that I wanna note about this is when we're using a moving average, what we're basically doing is comparing an index to itself, basically historically. But for some traders and some investors, they like to know, well, among the different industries, which is the strongest and which is the weakest? For some, they like to look for strength and they participate in that. For others, maybe they're looking for some recent weakness, where are the indices that have fallen out of favor and maybe there's opportunity there.
Well, in either case, there is a quick tool where one can keep track of developments of the different major indices on a comparative level among them, and that is a little tool up here known as, and I'm gonna leave our moving average on there so that we can still see it as we look at other charts. But let's go up here and add a tool called relative strength. Okay? So I can start to type in the word relative or I can just go down in alphabetical order, but I'm looking for this. It's called relative strength. Now, Sleepy Money says, why is my Thinkorswim different than the one Mr. May has? Well, it may be just cosmetic differences. Like you might have a black background and I have a white background, for example, or you might be using an entirely different version.
That's definitely a possibility. So I'm using Thinkorswim, the desktop software platform, but we also have the mobile app, and we have a Thinkorswim web, which is a website that you can visit. Those are different versions. So just make sure that we're using Thinkorswim desktop. Okay? But I'm gonna add relative strength to our chart. And as I click apply, what you'll see is that we're left with this, with this pair of lines down below our price chart. And as we explore this tool, I just like to get a gauge. Can anyone chat in and let me know if you've used relative strength before. We've got 117 people watching. I'm guessing there are gonna be dozens that are familiar with this indicator.
I would guess that most of those watching were already familiar with the moving average, but I also would guess that there are gonna be dozens that are not familiar with relative strength. Okay? But what is relative strength? Well, in this case, it's a pretty straightforward indicator that's just comparing from day to day and from week to week, whatever we have on our chart up here, it compares that to the S& P 500. So for example, we have the NASDAQ composite up here. If the NASDAQ were to go up 1%, but the S& P were to go up 2% on a given day, what does that say about the NASDAQ for that day? Well, it was weaker that day. Still went up, but not as much.
That would show up as this, as this relative strength line going down. So there can be times when our chart levels are rising, but our relative strength levels are falling. Because if this chart level is rising, but not as fast as the S&P 500, that's sort of the baseline comparison symbol. Yeah, we'll see our relative strength line drop. And for some, that may signal, hey, if the NASDAQ is stronger, maybe that's the place to be with new bullish positions, for example. Maybe it might have conceptually better odds. If that sort of behavior persists, maybe the odds are better in the NASDAQ for a period than with S &P component companies, for example. That's one potential application. So, for example, here, you can see in April, May, June, July, the NASDAQ was going up.
If we were to look at the S&P 500, oh, I threw something. I threw in an extraneous dollar sign. Anyway, April, May, June, July, the S &P itself was also going up, but the NASDAQ was actually going up faster. And we'll see that reflected in this blue line. When we see the blue line going up, it means for that period, greater strength on our charted symbol than on the S&P 500. So that's what this blue line is. What is this red line? Well, the red line is sort of the baseline comparison. The red line is sort of the baseline comparison of the S&P 500 since the chart started. So that's a fancy way of saying that as of any date on the chart, like if I were to look at this date on the chart, not only had it recently been performing better than the S&P 500, but as of that date, it's also done better net than since back here, August of last year.
Now, at this point, you'll notice we're down below the red line. That means that our charting is going to be better than the S&P 500. symbol has done worse than the S&P since the chart started. Does that make sense? Okay. So that's just sort of a baseline comparison for the trailing 12 months or for whatever time frame. If we're on a six-month chart, it would be the trailing six months, that sort of thing. Jim says, do I have to compare the S&P 500? Could I compare a different index? And actually, we could, Jim, if we were to go up here, edit that study. So here's our study right there with the S&P 500 as our baseline.
If I were to click on the little gear, it does allow you to change to correlate with some other index or even with another stock, because sometimes people want to compare stocks, one with the other. Which one of these two is relatively stronger? Okay. So for example, if I wanted to look to see, well, what if we looked at the Russell, the rut? Let me click okay, click apply here. So now what we're looking at is, oh, no, I didn't hit enter on my keyboard. I skipped one step. I got a little anxious. Can be important. There we go. By hitting enter, we can now see that the rut is the comparison symbol. Click apply, click okay. So overall, how has the NASDAQ been doing compared to the Russell?
Well, if our blue line is going up, this is telling us comparative performance of this chart to this one. Okay. So yeah, the NASDAQ, and especially over the last several weeks, has been really outperforming the rut. I don't even need to look at a chart of the rut to know that. So another nifty little tool. I'm going to switch this back here. Let's go back up, not our chart settings, but our flask icon. Let's switch this back to the S &P 500 as our baseline. Click apply, click okay. Because I want to leave that there for the rest of our discussion. So we've introduced, a few new tools, or not new to everybody, but introduced three tools that might be used for keeping track of different major market indices.
Well, let's go a level deeper. Sometimes a trader wants to see, well, within that index, within the different indices of the marketplace, which sectors seem to be doing best? Is it healthcare? Or is it technology? Is it consumer staples? Is it utilities? Where is it? And so we're going to look at that. And so we're going to where is the strength and where's the weakness there? Now, let me throw this out. Before I even bring up the different sectors and show you the tools that one can use to keep an eye on those, what's been driving most of the growth for the last 12 months, would you say? Give me two or three sectors that you think might be primarily responsible for a lot of the uptrends that we've seen, because there's not a lot of breadth to the participation in the trends at times.
Some sectors do really well, while others are doing comparatively poorly. So let's take a look at sectors. And actually, Thinkorswim, just like they have a handy list of the indices up here, they do have a handy list of the sectors over here. Let's go over to our gadgets in the left column. And I'm going to be using the watch list tool. So this is going to be tool number four. Okay. So under watch list right now, I'm just showing the component companies of the S&P 500. But look at that, David, technology, communications. Yeah, gold star for you. Let's look at the different sectors. I'm going to click on S &P 500, just that watch list heading.
And by the way, if you don't happen to have a watch list, if you're new to using thinkorswim, and you see the gadgets over here in the left column, but you're not seeing watch list as one of those, you can add one right down here. You can add a gadget and choose watch list. Or you can change an existing watch list or change an existing gadget using this menu icon right there. You could switch to a watch list gadget. Okay. So in any case, we need a watch list in order to look at the public watch list that's created and maintained by Thinkorswim. And the one that we're going to be looking at today going in alphabetical order through the public watch list. We're going to the S &P 500 sector indices.
Okay. In my mind, I just abbreviate that to sectors. And then we get this, this list. And actually, if I were to expand out this gadget column so that you can see these full symbols, not every symbol of every stock or index actually makes sense. As a matter of fact, most of them don't, right? If you think about, if you think about Corning, it has a symbol GL. Well, that doesn't strike me as perfectly intuitive. Well, in the same respect, we look at this symbol here, dollar sign S P S P 500 pound sign 10. I happen to know that's one of the sectors. I don't know. I haven't memorized them all, which sector it is. So I do like to use labels for these.
And this is useful even for stocks that one might not recognize like alphabet is Google, right? For example, G O O G L. It's the symbol for actually for the company alphabet, which is yes, basically Google. But I'm going to click on this little gear icon and customize my list of columns. And I'm going to add something called description. So this is sort of a bonus little tool here. Let's add that. So now we're going to have market cap as a column, last price as a column and description. I'm going to move that up so it's right next to the symbol. Okay. Click okay. And now what I can see is we have, oh, so this is a number. So pound 10 is energy, pound 15 is materials, pound 20 is industrials, and so on.
And now what I can do is I can either type these symbols in up here, or if we've linked this symbol box with this gadget in the left column, all we have to do to create a link is to select the same number here. Now we can click on any of these symbols, and it automatically populates. There's the energy sector, okay? Nice thing here is as we retrieve, and I'm going to sort of squish down this left column again so we can just spend more time and attention on the charts here. I can now see there's energy. And how has energy been doing if I'm already familiar with my relative strength tool? Compared to the S&P 500, well, the S&P's benchmark for performance is right here, and it's below it, so it's trailing it for the year.
And I can also see performance has been struggling even recently. Now for some, though, there is some hope for energy here, right? When a trend line is broken on the relative strength, sometimes a trader might see that as a sign that they're going to be able to get a little bit more energy. And that, oh, maybe better days are ahead. For example, we had kind of a downward-sloping trend line here, broke through it right there in February, and you can see energy had a pretty nice run there from February into May when it broke another trend line on that relative strength and then started to come down again. Doesn't always mean that a sector's about to move into favor, but that's one thing that some traders might look for.
So let's look at this. Somebody said, so here's our, our information technology, how has it been performing? Yep, look at the over the last 12 months. It's one of those stronger sectors outperforming the S&P 500. And right now, recently breaking a downward trend line, underperforming the S&P 500 and starting to outperform again. What about communications? That's right here. Yeah, look at this. Been outperforming basically all year. There was a moment when it was close to a wash. Right there. So if we looked at the S&P 500 and compared its net increase for those four months to the, to the performance of communications as a group, it was close to a wash as a right there. But since then, communications have been outperforming. Not a, not a terrifically compelling recent development here for communications.
But yeah, this little tool here might allow a trader to look for, where's the strength? Or maybe where is emerging strength? Where's emerging weakness? Here's, this is industrials. It started to recover. Look what's happening recently. Charts going up. This is going down. That means the S&P is going up faster. Okay. All right. So a final tool that I think is, is quite intuitive. To use, but it allows one to keep track of not only, you know, broad movements across the different sectors and the indices that those sectors represent, but that a trader might even look at which stocks are having a good day or a bad day. That's right up here, our market watch tab. So our market watch tab, I'm going to go to the visualize page.
And what we're left with here, let me close up this left column. I don't need it anymore for this discussion. This tool has different sectors. You can see the sector labels here, information technology, financials, consumer discretionary, consumer service or communication services. And they're grouped into basically rectangles. So you'll notice here's our information technology. And around the perimeter of that, there's a thicker margin. This is drawing a line or a box around the companies within that sector. And what the trader might be looking for here is this is, these are developments among, among the different sectors and among different stocks within those sectors just today. So a trader might look at this and say, well, here's Nvidia. It has a big box, which means it's a big company in information technology.
It also has a green box, which means it's having a good day. The darker the green, the more prominent the green, the better the day that company is having within that sector. And so a trader may look for, okay, which sector has the most green, the darkest greens, and it can actually zero in on individual companies. So if I look at AMD, for example, it has an even darker green, and you can see that its percent change today is plus 4. 21% versus Nvidia, which is plus 3. 47%. And so if we, if we are looking for sector strength, we might just look for the general appearance of the box surrounding the sector. If we're looking for individual company strength, we look for the symbol and its color scheme, and we can even look among the different indices over here.
So right now I'm looking at the sectors in the S&P 500. If I wanted to look at those in, let's say the NASDAQ or let's, let's look at the Dow. So there's information technology, only 30 companies. There are going to be fewer companies here. Consumer discretionary, consumer staples over here. So finally, when a trader has, has navigated to their preferred index, and they've looked for the sector strength that's appealing to them, they can even right click on a specific company. Actually, pardon me. It's just a normal click, just a left click. Go to more info on that company. And you can even just quickly retrieve a chart. So you can go to like thinkorswim charts right there. And that brings us right back to our chart.
It has Nvidia, and it even has the other tools that I've already preloaded. So, guys, with that, those are our five tools for tracking market indices and sectors using thinkorswim. Pretty nifty tools. A lot of you familiar with these tools, but this is a getting started webcast series. So if this has helped to move you further along your learning curve with the navigation and the usage of the tools on thinkorswim, then we've accomplished what we hope to achieve. Okay. So time for me to let you go. Everybody, there's no Lizanne live. So we're going to have a little bit of a break. Then we'll rewe'll, we'll start up again on the next hour with our, with our next webcast. So go enjoy that. But I, I do want to invite you back.
Come back again next Monday. We'll have another discussion getting started with Thinkorswim, but I also have webcasts throughout the week on other topics. So I'd love to have you in those webcast series, but Barb and I finally would like to issue an invitation to you. If you're not following us on X, please do. You can follow Barb there at Barb Armstrong CS. You can find me on X at Cameron May CS, but this is the best place to connect with your favorite webcast/ web cast presenters in between the live streams. And it's; and if you haven't subscribed to our YouTube channel, do that as well. Also, doesn't cost anything. It only takes a second, but subscribing to our YouTube channel-that's the best place to find our previous webcasts organized into playlists.
Those are; those are really organized by topic. So we can get a very targeted educational experience using our previous webcasts right there, or you can join our live streams as well. Okay. Everybody, thank you for joining me today. Go enjoy the rest of our webcasts through the rest of the day. Thank you to the 35 people who have already given a like to the, to this live stream. That's very much appreciated. If you're watching on the archive, or if you're watching a live stream, if you just make a habit, click the like button, every time you see a webcast that you enjoy, it helps every single time. All right. So that's a that's, that's going to be my last request of you. Thanks for joining us today. Go enjoy the rest of your day. I'll see you again on Monday of next week, or maybe sometime in between in a webcast. I'll also look for you on X, but whenever I see you again until that moment arrives, I want to wish you the very best of luck. Happy trading. Bye bye.
