The lower and upper ends of the probable
price range for the (big-cap) Dow-Jones Industrials Average are marked
by double lines across the left-hand thermometer. The same is marked for
the (small-cap) Russell 2000 index on the right.
Current market prices for these indexes are indicated by the red levels,
giving a sense of upside and downside proportions between there and the
double-line forecast extremes.
Between the two thermometer bulbs is a scale measuring those proportions,
calibrated in Reward:Risk ratio units. The idea behind this scale is illustrated
below the Thermometers. The proportion of upside to downside gives a qualitative
measure of attractiveness, ranging for a buyer from 100:1 as best to 1:100
as worst. Market indexes are getting underpriced outside of 5:1.
This same notion of upside vs. downside provides the means of directly
comparing stocks of widely differing underlying companies. To see such
a comparison:
- Click on
at the bottom of the Thermometer page
- At the Product Menu click on

This will bring you to a Risk:Reward (R:R)
Chart of the Dow Jones Companies.
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