40 point premium in YM

Discussion in 'Trading' started by flipflopper, Jul 10, 2007.

  1. I only know up and down :eek:
     
    #11     Jul 10, 2007
  2. Dude... if you haven't noticed a lot of relative strength between the YM and the ES the past 2 days you haven't been paying any kind of attention.
     
    #12     Jul 10, 2007
  3. YM is based on an underlying index of 30 blue chip stocks

    it is PRICE weighted

    ES is based on an underlying index of 500 stocks. it is capitalization weighted
     
    #13     Jul 10, 2007
  4. zyadam84

    zyadam84

    Whitster has got the point.
    The computation method for these two are different. There was a very interesting article from 'Think outside of the box' newsletter a couple of months ago. You can contact them to see if an extra copy could be available.
     
    #14     Jul 10, 2007
  5. mde2004

    mde2004

    YOu lost big money trading without any regard of risk.
     
    #15     Jul 10, 2007
  6. as long as he ONLY knows up and down. he should have no problem blowing through his inheritance in maybe 2 days. :D
     
    #16     Jul 10, 2007
  7. I am aware of how the figures are generated but in general they move in sync. Yesterday the ES was up about 1 and the YM was up about 40.

    In general when market is strong people buy all stocks including DOW and S&P 500. If one is stronger or weaker then the other it is usually attributed to huge news in one or more of the DOW stocks. I can't see a reason for this premium just trying to see if anyone else had some insight,
     
    #17     Jul 10, 2007
  8. Although on 'average' YM may move 10pts for every 1 ES point move, it is an average. Within that, you are going to get days where one shows relative strength over the other and vice versa. There can be different reasons for the divergence. For example, if you get just one or two dow components that are very strong on the day( due to earnings, news etc...), in comparison to the rest of the market, then there is a good chance that the dow(YM) will show relative strength over ES. It can also be something as simple as one of the indexes reaching a support/resistance level and taking a breather while cash rotates into another index.
     
    #18     Jul 10, 2007
  9. the correlation, last i checked is roughly 90%

    there are (to some extent) different stocks within each index.

    thus, they don't move the same

    why is that hard to understand?
     
    #19     Jul 10, 2007
  10. Thanks macal that was exactly the type of educated response I was looking for.

    Too bad we don't have more posters like you.
     
    #20     Jul 10, 2007