ES (e-mini) vs. SP (S&P BIG) vs. YM, DD, DJ Debate

Discussion in 'Index Futures' started by trainee2006, Aug 15, 2006.

  1. Commentators and traders say they "watch the S&P" for clues as to overall market direction.
    According to the responses to my earlier thread...
    If the Big S&P has 1/8 the volume of e-mini's, and
    If the Big S&P has greater slippage, and
    If the Big S&P only accepts phone orders during a certain time of day,

    Then why do so many people use the BIG S&P as a "tell" for market direction rather than the e-mini?

    Also, another school of thought holds that some thin markets are better "tells" than broader markets. (using the Dow futures as a tell for the S&P) Why not use the YM, DJ or DD?

    What does everyone think?
  2. nkhoi

    nkhoi Moderator

    force of habit and since everybody else say they use it then everybody use it (we are part of the great herd in case you didn't know), I use DJ instead.
  3. The reason is it may not be the truth.

    The reality is rather a mix. Emini and big S&P has the same underlying. If there is difference between the two, arbitrage will bring the overvalued instrument down and the undervalued one up.

    I think no index always lead or lag another. Sometimes one leads. Sometimes another. There's no easy way to apply their relationships into prediction.
  4. ktm


    You should watch whatever it is that you trade. Don't take this wrong, but who cares what direction the market is headed. If you are trading OIH (oil) and the market is headed up, what does that tell you? There are substantial deviations between DJ/SP/ER2 etc... that can last for months at a time.

    What are you trading?
  5. yeah, i use the dow and nasd as well