If you are a day trader type investor what is a good market index to look at ?

Question

so as to see the changing market values of the stocks ?

Answer 1

From a daytrader standpoint:  The big three are the most important - S&P 500, Nasdaq, and the Dow 30 Industrials.  This is because they are the most tracked indexes in the United States, and therefore have the most liquidity and lowest spreads when it comes to trading their instruments (ETFs, options, futures).

Also, their high trading lessens unpredictability in the sense that, for example, small cap stocks can have immense jumps in prices for just one large or a few orders.  Because these indexes are so widely followed, just a few orders have significantly less impact on prices.  It is also important to note that the QQQQ, which models the Nasdaq 100, trades on heavier volume than any of the other index ETFs (as of last year).

As for being conservative, there are a few general principles.  For example, the S&P 500 futures are the most traded by professional traders.  As a result, more novice traders often stick with the Dow, although it's really a loose relationship.  Also, the Nasdaq is significantly more volatile than the other indexes (tech stocks), and conservative traders would be less likely to trade that.  Also, since the Dow only has 30 stocks, the S&P 500 is considered a much better indicator of the entire market.

Other indexes worth noting are the sector indexes and Wilshire 5000.  The sector indexes show the performance of each sector (naturally) for comparison.  These are best used for both trading and investing to filter out the market.  The Wilshire 5000 contains all the stocks actively traded in the United States weighted by market cap, and is often considered the best total market index to look at.  

Good luck.