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Index Futures Affected?
- Thread starter Lightningsmurf
- Start date
Quote from Grob109:
There are connections among the markets. This aspect is not a significant one though.
The key and fortunately very dynamic one is the leading relationship of the Dow compared to the ES emini. Since the Dow leads the ES emini, you can use the Dow cash and futures relational dynamic to telegraph the moves on the ES emini.
I use terms like neutral, squeese and stretch to describe the Dow dynamic. Neutral describes times when there is no tendancy up or down for the moment. A moment is less than five minutes and about three or four moments occur per 5 minutes. The "squeese" and "stretch" work the same, once the moment is either, there will be movement (change) very very shortly (30 to 45 seconds) in the ES emini. A volume burst (on Emini) signals the move. You watch the "small" side of the "Market depth" the see when the move stalls out. The "small" dissappears and neutral (balance on market depth) resumes. For "long" moves the squeese is the rule. For "short" moves the stretch is the indicator.
Fortunately, You can calibrate the values of the stretch, neutral and squeese on a daily basis. Today squeese varies between -1 and 3 neutral is 5 or 6 and stretch can range up to 9 so far today.
The beginning of the quarter involved values like 36, and 24.
OT for those who are familiar with the Dow for over 10 years, you can remember where the quarterly offset was 300 to the Bull side.
Now a days the quarter began 36 points to the Bear. Thoughout the quarter the narrowing was normal for the quarter as usual. But a week and a half ago the beginning of the Xover from Bear to Bull started. today was the first day that a squeese got to -1 which is a Bullish value.
Don't worry if this seems like BS to you. It will to most people as usual. But in fact, this aspect of using the lead of one market over another actually makes making money extremely simple and uncomplex. The market pace and "noise" levels , etc can also be determined by this dynamic. Especially congestion and consolidation periodicities.
AMT4SWA commented on the duration required to get the T&S, streaming and market depth to be second nature (6 months), in this case the effort, if you log it using 7 columns and a graphic column for a trail of bar movement, it takes about two weeks for beginners. It is much less sophisticated than any other monitoring schema that is comprehensive.
Gorb109,
I have been following this indicator for about 3 weeks now. I am really trying too figure out how it could be used in conjunction with SCT strategy. I find that during fast pace markets, i feel that this indicator does not do a great job of giving you a head start of a reversal trade. Stops are busted so quickly during fast paces that i feel that it is not a leading indicator for this market pace. I think the "stretch/compression" is best used during medium paces and slow paces. I think it would be useful for taking reversals at ends of medium and slow pace trends.
I do have a minor gripe. Due too the stretch/compression being a momentary indicator, it draws you too the shorter time frames like the 1 minute. I personally do not want too focus on the 1 min and would rather trade off the 5 min as it is a more optimal time frame. The only reason i want too be on the 1 min is for stop logs and volume. Otherwise, i want too scurry too the 5 minute. Could you go into more depth of how you find this indicator useful in conjunction with SCT?
jc