10:30 algos

Discussion in 'Trading' started by flipside21, May 9, 2012.

  1. I've seen this a number of times already, but when there are problems in Europe, SPX swoons to 10:30am EST, then immediately rallies after that. Just happened 15 minutes ago and SPX is up 7 points from the low at 10:30.
  2. joespo


    I noticed this as well.
    Can someone enlighten me as to why?
    Do we follow Europe's trend to start (as we should), but then say "screw 'em let's rally!" and try to breakeven by the end of the session?
  3. vinc


    no,no,no..you've got it all wrong guys! you should look at divergencis, macds,moving averages and support- resistance stuff along with trend lines..no algos hunting here!:D
  4. Cross market arbitrageurs are limited when they have no market to cross into after 1030am CST. During the 2 hour overlap, downward pressure on European markets spreads via eur/usd and chf/usd into US markets.

    Google ADR arbitrage for more.
  5. Like a broken record, to my great annoyance.
  6. Stay annoyed or learn? Maybe you should trade against the 10:30 continuation? Just a thought.
  7. Agreed. If it's so obvious and simple, just trade alongside them. Trade with super-duper leverage, too, since it's such a sure thing!
  8. pure coincidence..

    it'll soon disappear
  9. joespo


    I need to know WHY something is happening before I create a trade to benefit out of it.
  10. Ask 10 'market experts' "why?" and you'll get 10 different answers. By the time you sift through the reasoning and data for each answer, any potential profit opportunity is gone. That's why you need to plan in advance, so that when something happens, you are ready to react. If these moves really are "algos", they were developed in a place so far outside of the public eye that no one outside of the group of developers has a clue what's going on with them. Do you really think that you are going to find out the "truth" about the "why"?

    Baseball players don't ask themselves "why" a pitcher just threw them a fastball, they just know that if the fastball is out over the plate, they are going to swing at it. Trading has to be built on an analogous type of 'muscle memory', only the muscle is your brain.
    #10     May 15, 2012