In the interest of this site, which promotes sharing and mutual financial benefit to all readers, here is something that has been very useful to me.
Plot a daily ratio spread of GS to SP500 in line form. Watch it long enough to get a 'feel' for that ratio spread and pay particular attention to the direction of the daily line. ie. up, down or flat for the day. It gives a good background for the personality of the market for that day. That background or personality for the day is very useful information to have before pushing the button.
That's all I'm gonna say about that.
Happy New Year.
If you day trade or just scalp occasionally
Started by
zigzag
, Jan 08 2009 11:08 AM
9 replies to this topic
#1
zigzag
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#2
IndexTrader
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Posted 08 January 2009 - 11:23 AM
Actually, I watch a number of key stocks and sectors, to include GS. And I concur, they (and it) give a good background for possible trades.
I would only say though that in the final analysis, price rules.
IT
#3
zigzag
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#4
Rogerdodger
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Posted 08 January 2009 - 11:30 AM
Thanks ZZ.
I'll check it out.
I like the VIX and SPX ratio for the same.
"Nature's Failure to Function in a 'Predictable Way'... 500 years ago?"
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#5
vitaminm
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Posted 08 January 2009 - 11:34 AM
which one leads market....gs or es?
vitaminm
#6
IndexTrader
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Posted 08 January 2009 - 11:47 AM
which one leads market....gs or es?
ES is a very noisy market. Lots of movement that seems unrelated to the cash index. For years I have watched key stocks, sectors, etc because I think in the end they tell the story. That said, ES is one of the first places cash goes when it wants to make a trade. And so a news item for example may show up there first, which creates a premium/discount, which leads to a movement in the underlying cash instruments. But again, in the end, if the cash is headed down, the ES will rejoin it. I think you have to watch cash to get a sense of reality when trading the ES. It can't go somewhere if the underlying doesn't follow.
IT
#7
zigzag
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Posted 08 January 2009 - 12:08 PM
which one leads market....gs or es?
Usually GS but that's not really my point. Trading is never cut and dried anyway. I don't want to give a tutorial on how I use that spread. But I do believe if one watches that spread long enough so that it seems boring, then it will give benefit to the one watching it. It's one of my favorites.
#8
winterscourtesy
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Posted 08 January 2009 - 12:18 PM
It is these types of threads that make me appreciate this board.
I will throw in two others that are breadth related:
1) Up-Down Volume on a 3 min line chart
2) ADV-DECL issues on a 3min line chart
You can even draw trendlines against them or look for HH and LL.
ZZ, IT and RD, what timeframes do you watch these charts on?
-Winters
#9
zigzag
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Posted 08 January 2009 - 12:52 PM
It is these types of threads that make me appreciate this board.
I will throw in two others that are breadth related:
1) Up-Down Volume on a 3 min line chart
2) ADV-DECL issues on a 3min line chart
You can even draw trendlines against them or look for HH and LL.
ZZ, IT and RD, what timeframes do you watch these charts on?
-Winters
Daily ( even though I use it for intraday trades) and I use GS/SPY to be specific. Thanks for ur post too.
#10
IndexTrader
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Posted 08 January 2009 - 02:26 PM
ZZ, IT and RD, what timeframes do you watch these charts on?
-Winters
I don't watch charts on GS or other key stocks and sectors. What I watch is a "quoteboard" that is in my software. I can set it up to show various things, but I watch open, high, low, last, and net change. If I want to see the chart on one of those then I can pull it up. I usually just look at the daily.
I also watch the A/D and up/down volume, but on the quote board setup.
IT
