SPY Volume vs ES Volume

[CyJackX]

I know their price action is generally identical, 1 ES tick ~ 2.5 SPY ticks.
However, sometimes I see a volume spike in one and not the other. I imagine since ES has the larger dollar-volume liquidity, its volume is more "important."
Right now I trade SPY, but with tick and volume data charted using ES.

Is my reasoning valid? Useless?

Also, since the ticks don't line up evenly, support/resistance may be broken on one and not the other?

 

[Scataphagos]

I know their price action is generally identical, 1 ES tick ~ 2.5 SPY ticks.
However, sometimes I see a volume spike in one and not the other. I imagine since ES has the larger dollar-volume liquidity, its volume is more "important."
Right now I trade SPY, but with tick and volume data charted using ES.

Is my reasoning valid? Useless?

Also, since the ticks don't line up evenly, support/resistance may be broken on one and not the other?

1. Suggest "playing the price chart". Volume analysis is useless.

2. Though "volume" is the Holy Grail to some, I say "volume means squatdouche".... I know, heresy. (But search the charts... you'll find tops/bottoms/reversals on high and low volume... and everything between.) Besides, your objective as a trader is NOT to be "in tune with volume"... it's to be in tune with PRICE!

 

[trdes]

I know their price action is generally identical, 1 ES tick ~ 2.5 SPY ticks.
However, sometimes I see a volume spike in one and not the other. I imagine since ES has the larger dollar-volume liquidity, its volume is more "important."
Right now I trade SPY, but with tick and volume data charted using ES.

Is my reasoning valid? Useless?

Also, since the ticks don't line up evenly, support/resistance may be broken on one and not the other?

But why would the support matter? like are there really rules or strategies where if support is broken by even 1-2 spy cents it would negate the strategy or trade? just curious.

 

[Scataphagos]

But why would the support matter? like are there really rules or strategies where if support is broken by even 1-2 spy cents it would negate the strategy or trade? just curious.

Support and Resistance should not be viewed like a line drawn with a razor... but rather like a "zone"... with a buffer.

That is... "mark it with a razor, paint it with a brush, cut it with an axe". There are no "exactly definitive" prices.... only "close, with a buffer margin for error".

 

[trdes]

Support and Resistance should not be viewed like a line drawn with a razor... but rather like a "zone"... with a buffer.

That is... "mark it with a razor, paint it with a brush, cut it with an axe". There are no "exactly definitive" prices.... only "close, with a buffer margin for error".

That's why I am asking why would it matter if SPY broke resistance but ES didn't...

 

[Scataphagos]

That's why I am asking why would it matter if SPY broke resistance but ES didn't...

Doesn't. Slightly different markets and players. Neither can break by a significant amount without taking the other with it... very short-term aberrations excepted, of course.

 

[trdes]

Doesn't. Slightly different markets and players. Neither can break by a significant amount without taking the other with it... very short-term aberrations excepted, of course.

I asked the question for him, he was posting about possibly SPY breaking support but not ES. I was curious to know why that matters to him, as if he has some strategy or trade that is dependent on exact levels, because in my experience even the best traders can't consistently get top tick or bottom.

I am not sure you can answer my question, I think he has to.

 

[Scataphagos]

I asked the question for him, he was posting about possibly SPY breaking support but not ES. I was curious to know why that matters to him, as if he has some strategy or trade that is dependent on exact levels, because in my experience even the best traders can't consistently get top tick or bottom.

I am not sure you can answer my question, I think he has to.

What does "breaking support/resistance" mean? Is a break "1 or 2 tics"? Is that significant enough to put money on? Any value one places on a breakout is subjective. Is 1 point enough? 2 points? I recall years ago players using a "2% buffer", let along 2-tics. (2% today would be 40 ES points!)

If there is a genuine break of S/R, both the SPY and ES will go along. A break of S/R on either chart by a "tic or two" is most likely meaningless, regardless of divergence. A genuine breakout needs to have "follow through"... and you can't know that yet at a "few tics".

 

[trdes]

What does "breaking support/resistance" mean? Is a break "1 or 2 tics"? Is that significant enough to put money on? Any value one places on a breakout is subjective. Is 1 point enough? 2 points? I recall years ago players using a "2% buffer", let along 2-tics. (2% today would be 40 ES points!)

All I was trying to do was ask him why he brought that up and why it was important to him. So, I don't think we're going to be getting anywhere without his thoughts.

I can't answer for him, he brought it up I was curious of his thoughts, i don't know what his definition of breaking support is.

I also have no clue what others use as a stop to be honest, I use the stop that works for me.

 

[Scataphagos]

All I was trying to do was ask him why he brought that up and why it was important to him. So, I don't think we're going to be getting anywhere without his thoughts.

I can't answer for him, he brought it up I was curious of his thoughts, i don't know what his definition of breaking support is.

I also have no clue what others use as a stop to be honest, I use the stop that works for me.

All stops are subjective and arbitrary. Best ones are chart-based.