Sunday debate

[arabianights]

F*** that, Olly the Octopus makes better trading decisions than most traders !

LONG OR SHORT OLLY ?

You can buy these interesting things:

Called ecospheres. Just leave em on yer desk and the prawns will live for a couple of years.

Do you reckon the prawns would be as good as the psychic octopus?

 

[timsk]

well think about how many shares you have to buy of a stock to equal the tick value of an ES future? alot..

Hi Roth',
Sorry, but I'm not sure what the point is that you're making?
My point is that the value of the shares traded on the NYSE and Nasdaq - let alone all the other exchanges - far exceeds the value of contracts traded on one futures instrument such as the ES. As for the YM (which I trade), it barely even registers on the Richter scale. Basically, there's more money being traded in equities each day than there is in futures, hence, where equities go, futures follow. I don't have figures to hand to support this, so if I'm wrong, please correct me.
Tim.

 

[N Rothschild]

you are wrong, consider yourself corrected. by there design alone of course futures move first, wouldn't be called a future otherwise would it? lol

 

[Splitlink]

You can buy these interesting things:

Called ecospheres. Just leave em on yer desk and the prawns will live for a couple of years.

Do you reckon the prawns would be as good as the psychic octopus?

So much for the more senior members' attempt to bring serious debate to T2W's weekend offering!

 

[timsk]

you are wrong, consider yourself corrected. by there design alone of course futures move first, wouldn't be called a future otherwise would it? lol

I was hoping for a more reasoned explanation - but never mind. I guess I'm just imagining things then when I see the NYSE Tick jump up and down all day and then, wait for it - there you go - the futures follow tag along behind!

 

[N Rothschild]

and how exactly are you correlating the NYSE tick to the es? tick is ALL stocks on nyse, it isnt the s&p500 which is a weighted index. TICK is not. so if tick is positive it doesn't necessarily mean that the s&p500 should be rising. you are being fooled, imo ofcourse.

lets say some big news breaks, what do you think is going to move faster, futures of 500 stocks? futures obviously, stocks then follow their lead.

 

[Xenophobia]

Well, here's a Sunday topic for you.

Technical Analysis is based on the concept of supply and demand, but FTSE is merely an index that has no supply and demand of its own. So how can TA be applied to FTSE with any confidence?

good debating

jon

Technical analysis is the visual inspection of opinions in the market and the outcome of speculation and market moving news. What this means is that we have a graphical interpretation of what people are buying and selling at any given time and any given time frame. :clap:

supply and demand is the thoughts of an investor/institution but us mortals have to interpret this thought process through the graphical interpretation of a chart.

Charts and T.A are created by price movements by higher market making powers by economic results and other factors.

 

[wackypete2]

pete,

Well, you can't buy or sell the index except by proxy can you? So there's no direct supply and demand.

You can buy and sell futures directly, so there is a clear relationship 'twixt supply and demand there.


jon

The futures will move the index which in turn will move the market. Remember, I'm talking about large orders being able to move the index and have the equities follow.

Peter

 

[timsk]

and how exactly are you correlating the NYSE tick to the es? tick is ALL stocks on nyse, it isnt the s&p500 which is a weighted index. TICK is not. so if tick is positive it doesn't necessarily mean that the s&p500 should be rising. you are being fooled, imo ofcourse.

lets say some big news breaks, what do you think is going to move faster, futures of 500 stocks? futures obviously, stocks then follow their lead.

Hi Roth,
Thank you for the lesson, although I'm already well aware of what the Tick and ES are - as well as their differences. If you watch the Tick for a while, you can spot the commercial buy programmes pumping liquidity into equities. For example, when the Tick hits +1,000 repeatedly over, say a 20 minute period, you know there's a whole load of lolly being ploughed into equities and it's not just retail traders buying a few hundred shares here and there! When futures traders see that happening, what are they gonna do? Let's see now, option one is to stand in front of the express train or, option 2, jump on board for the ride. Which would you rather do?

I do agree with you though regarding news and, generally speaking, Tick will meander around the zero line prior to an announcement. If you see buy programmes hitting equites ahead of news, then my interpretation is that either the smart money is taking a massive gamble or they know something we don't.
Tim.

 

[wackypete2]

excellent debate. These are the kinds of threads I like to participate in.
Much better that the "My name is ODT and I'm and idiot" thread going on right now....

Peter

 

[wackypete2]

then my interpretation is that either the smart money is taking a massive gamble or they know something we don't.

There's your answer. Smart money never gambles.

Peter

 

[Xenophobia]

Hi Roth,
Thank you for the lesson, although I'm already well aware of what the Tick and ES are - as well as their differences. If you watch the Tick for a while, you can spot the commercial buy programmes pumping liquidity into equities. For example, when the Tick hits +1,000 repeatedly over, say a 20 minute period, you know there's a whole load of lolly being ploughed into equities and it's not just retail traders buying a few hundred shares here and there! When futures traders see that happening, what are they gonna do? Let's see now, option one is to stand in front of the express train or, option 2, jump on board for the ride. Which would you rather do?

I do agree with you though regarding news and, generally speaking, Tick will meander around the zero line prior to an announcement. If you see buy programmes hitting equites ahead of news, then my interpretation is that either the smart money is taking a massive gamble or they know something we don't.
Tim.

You always get smart ass experts dude as you will know.

The problem is where do all of these market wizards come from

And what they doing scrolling through trading 'HELP' forums

 

[N Rothschild]

totally wrong, forget tick. simply open 2 charts one of cash open future when at a support/resistance area and see what breaks first.

and just to really annoy you, the ES actually follow the SP contract, the big traded in the pits, which has even less liquidity. SP > ES > Cash. anytime this correlation breaks down, the arb boys step in.

 

[timsk]

And you ought to learn your place and not get cocky with your elders and betters! Rothschild has explained - perhaps if you ask nicely he will explain again more clearly for your benefit.

As to what you think you are seeing, and what you may or may not imagine when looking at a screen; irrelevant, I am sorry to have to tell you.

Oh how nice it is to see you again clarette. I haven't been patronized like that for a long time. Thinking about it, not since you last posted. Anyway, given that you've decided to grace us with your presence, and as my 'elder and better', I shall gladly stand aside and let you explain for my benefit and everyone elses what I'm not seeing on the screen that I think I'm seeing. Unlike you, I'm very willing to be corrected when I'm wrong and to acknowledge the fact. So, over to you . . .
Tim.

 

[N Rothschild]

timsk.

here we have s&p500 cash spliced with ES futures, tick, vertical lines highlighting where the ES moves before the cash. random segment from friday, will do the same for any time peroid you like if you dont accept this as solid proof.

are we done here?

god damn i love bloomberg.

(there are 2 occasions the cash moves first, compared to the ES's 6.)

 

[N Rothschild]

why was clarretes post removed? because he was right and timsk is wrong? pathetic.

 

[Lightning McQueen]

why was clarretes post removed? because he was right and timsk is wrong? pathetic.

post was deleted by the poster, and not removed by a mod or admin - ok

 

[N Rothschild]

post was deleted by the poster, and not removed by a mod or admin - ok

i retract my statement then

 

[MrGecko]

My basic understanding is that Futures lead the Stocks which drive the Index.

I don't see how an index can lead it's component stocks, because the index is derived from the stock prices - not vice versa.

I also thought that the natural liquidity for large equity basket deals is in the futures and EFP market.

I also heard that some individual stocks lead the index if is is heavily weighted enough. The Dax I think is a good example of this, with a disproportionate amount of the index being derived from only a few stocks.

Either way, in my experience it doesn't make sense for to be saying "X always leads Y".

 

[N Rothschild]

My basic understanding is that Futures lead the Stocks which drive the Index.

I don't see how an index can lead it's component stocks, because the index is derived from the stock prices - not vice versa.

I also thought that the natural liquidity for large equity basket deals is in the futures and EFP market.

I also heard that some individual stocks lead the index if is is heavily weighted enough. The Dax I think is a good example of this, with a disproportionate amount of the index being derived from only a few stocks.

Either way, in my experience it doesn't make sense for to be saying "X always leads Y".

can happen in the NASDAQ, apple is a whopping 20% of NASDAQ index.