How can you assume that because Shanghai goes down that money goes into other markets. Do you know how stupid that sounds? And what happens when Shanghai goes up 2% and US goes up 1%? Where did that money come from? Just appeared? There is so much liquidity in the world...to think you have any chance of tracking it is like saying that you're going to use your ham radio to call aliens.
It doesn't sound stupid to me at all. A 1% day is not a 9% day. I believe that markets become asymptotic on big down days and truly show their structure on these extreme days - correlations go to one and most market players of a certain type act like a cooled ferromagnet. The computation is real. The assumptions may lead to a poor model, but that is true of anything. Get the axioms wrong and you can prove anything, like 1=0. We are going around in circles. You think it is a poor assumption that money that left SH is being put to work here and that it is substantial. I don't. All is well. nitro
So far everything on automatic pilot. About 15 to 30 handles more to go, or that would make the ES at about 1470 - 1485 based on M7 contract. The important thing to remember is, the SPX could go to 1401 or so, and based on my analysis, the uptrend would still be in place. I don't think it comes close to 1401 SPX. nitro
The 10 handle moves that I thought would start occurring in ES have turned into 20 handle moves. Remember 2002-03 when 10 handle moves were the norm? This is incredible if it continues, but I suspect it will "settle down" to 10 handle moves. nitro
Holy smokes. Was short. Thought it was easy and let it ride in a synthetic short. Was up decent, but when SIFs went green, I was forced to exit at a small loss. Now they have been clobbered again. This is what 2002-2003 was like. Fasten your seat belts!!! nitro
I won't touch ES long unless SPX goes above 1520ish (assuming a basis of 15ish). I may try to catch a falling knife around 1450 - 1470 ES, only on green days. I choose the direction and assets, my ATS does the trading from then on. I just sit and collect, or take a small loss. nitro