39 replies to this topic

[SemiBizz]

It all depends on the timeframes you are trading... While in the "local" zone that 1509 is a compelling test target on the futures contract, the longer term chart and today's light volume (not sure about the contract volume) is saying you better be quick, because when the spring trap sets, you can expect FAST UPTREND. With respect to the 1509 test today, we'll have a better answer on that within the next 40 minutes in the daily countertrend window. So just to be clear. So we understand what is going on here, the light volume retracement back down is a good indication that the overall trend is up. We expect primary legs A to B and C to D to come on strong volume and B to C retracements to come on light volume.

Edited by SemiBizz, 29 May 2007 - 11:43 AM.

[OEXCHAOS]

I think that the futures drive the cash. I don't think the normal derivative rule works here.

How can this make sense, the cash index is reflective of all 500 stocks that are bought and sold by institutions and the public, isn't the value of those cash transactions greater than the futures?

I'm saying that much of that buying and selling in the cash is driven by the buying and selling in the futures. Programs run this market, guys.

Mark

Honestly, Semi, I think that the futures drive the cash. I don't think the normal derivative rule works here.

FWIW: I can say this, about that: Volume data on ES has a higher predictive content then volume data on cash.

That has been my read, too. There's a lot of stuff going on in the futures that drives action in the cash. If you think about it, if the futures go to a discount, what happens? They sell the stocks and buy the cash (or a basket of stocks). No brainer. An absolute TON of the S&P volume is directly related to non-directional trading. Just programs. Actually, I suspect that buying and selling in the ES is probably more like "Real" buying and selling. At least short term. And empirical evidence supports.

And I gotta say, I only started looking because of things Semi was saying. And the fact that I stare at the futures all day long...

Mark

It all depends on the timeframes you are trading... While in the "local" zone that 1509 is a compelling test target on the futures contract, the longer term chart and today's light volume (not sure about the contract volume) is saying you better be quick, because when the spring trap sets, you can expect FAST UPTREND.

With respect to the 1509 test today, we'll have a better answer on that within the next 40 minutes in the daily countertrend window.

That's about my read. In fact, I've moved my target up. Now is NOT the time to be greedy on the short side.

So just to be clear. So we understand what is going on here, the light volume retracement back down is a good indication that the overall trend is up. We expect primary legs A to B and C to D to come on strong volume and B to C retracements to come on light volume.

That's what the sentiment says we'll do. At least for now.

Mark

[SemiBizz]

I can assure you that the Cash always takes precedence. The futures and options contracts are only short term instruments... and short term signals always have the highest degree of error... It's silly to think that the options and futures market predict the cash market. The SPX cash index is a compilation of individual stocks prices and volumes. I suppose you were thinking about the SPY. No way do the futures drive that huge underlying set of stocks in the index.

[jjc]

It all depends on the timeframes you are trading... While in the "local" zone that 1509 is a compelling test target on the futures contract, the longer term chart and today's light volume (not sure about the contract volume) is saying you better be quick, because when the spring trap sets, you can expect FAST UPTREND.

With respect to the 1509 test today, we'll have a better answer on that within the next 40 minutes in the daily countertrend window.



So just to be clear. So we understand what is going on here, the light volume retracement back down is a good indication that the overall trend is up. We expect primary legs A to B and C to D to come on strong volume and B to C retracements to come on light volume.

ES Volume


Date esm, Volume, Volume todEMA(n=5 Tuesday), Volume todEMA (n=5),
--05/29/07 12:30:00, 90539, 57119.924, 72335.567,
--05/29/07 12:00:00, 73850, 64893.749, 64305.658,
--05/29/07 11:30:00, 48776, 51054.876, 51134.513,
--05/29/07 11:00:00, 58719, 74168.219, 75725.528,
--05/29/07 10:30:00, 115951, 149920.4, 103262.78,
--05/29/07 10:00:00, 130575, 131962.54, 100041.75,
--05/29/07 09:30:00, 14726, 15184.65, 11094.818,
--05/29/07 09:00:00, 3803, 21612.083, 8744.1443,
--05/29/07 08:30:00, 8781, 7919.2681, 6594.4166,
--05/29/07 08:00:00, 3197, 4940.1327, 3346.8969,

I would take note of the unusual volume distribution.

Fairly safe to say Low of the day has not been seen (lod != 1517 && safe != certain). 1509 is not in
the realm of the probable today. Project 1516 to 1512; 1516ish more likely.

[Russ]

It's silly to think that the options and futures market predict the cash market. The SPX cash index is a compilation of individual stocks prices and volumes. I suppose you were thinking about the SPY. No way do the futures drive that huge underlying set of stocks in the index.

Mark I agree what Semibizz wrote. The stock market is a measure of the underlying economy - all those thousand points of light George Bush senior talked about, the individual contributions of production and consumption by the masses. The tail does not wag the dog.

Russ

Edited by Russ, 29 May 2007 - 12:17 PM.

[SemiBizz]

I will tell you this, the primary support for the SPX Cash here is 1511. If 1511 holds, 1524 should come.

[atlasshrugged]

I can assure you that the Cash always takes precedence. The futures and options contracts are only short term instruments... and short term signals always have the highest degree of error...



It's silly to think that the options and futures market predict the cash market. The SPX cash index is a compilation of individual stocks prices and volumes. I suppose you were thinking about the SPY. No way do the futures drive that huge underlying set of stocks in the index.

WRONG!!!!!

[jjc]

It's silly to think that the options and futures market predict the cash market. The SPX cash index is a compilation of individual stocks prices and volumes. I suppose you were thinking about the SPY. No way do the futures drive that huge underlying set of stocks in the index.

Mark I agree what Semibizz wrote. The stock market is a measure of the underlying economy - all those thousand points of light George Bush senior talked about, the individual contributions of production and consumption by the masses. The tail does not wag the dog.

Russ

I would urge you to test your hypothesis and see how it holds up over time.

[redfoliage2]

If my bastardized Semibiz approach to the ES is any good, we should see 150900 tested soon, barring some buying volume coming in. The high ARMS supports it being sooner rather than later, and the EOM suggests that if it isn't today and tomorrow AM, it won't happen until next week.

Mark

Congratulations, Mark! A good call and I was thinking the same, especially with the rising TRIN.

[thespookyone]

Cash leads up, futures lead dowm.