Those charts are a poor boy attempt to debunk Mr. Hershey's contention that YM leads ES. As I do not have a CBOT subscription, and it is not worth buying it for a month just to rag on Jack, I chose to examine the assertion using DJX and SPX as surrogates. My experience measuring instantaneous premium on NQ suggests that the YM and ES premia cannot be the cause of the alleged phenomenon, therefore using the underlying should be reasonable. As the faithful claim that YG in two minutes leads ES in five, I chose to define a DJX/SPX divergence as two consecutive minutes of DJX down while SPX is up or unchanged, and vice versa.
In general the results have not been kind the Hersertion. One suspects, as I think it was ETLurker who wrote, the dillusion is an artifact of the two different time frames. I think it is the credulity of the Jackers, who see Booja where none manifest themselves.
BUT, the exercise was immensely useful (if utterly trivial algorithmically), as I have identified potential leading indicators for NQ, which of course I will not reveal.
I am on a sacred mission to explain to each new generation of credulous Jackers that in trading, one QUANTIFIES, CODES, THRESHOLDS and TESTS every half-assed trading idea that comes to the febrile (if feeble) minds of nearsighted and delusional old men like Jack and me.
If you are old enough to recall who I am (a faded early fifties celluloid figure), then you will ignore everything I post, realizing that I am never up to any good. Kind regards.
