ES, NQ & YM - Question about using them together

Discussion in 'Index Futures' started by Flashboy, Nov 20, 2003.

  1. Maybe some experienced index traders can help me out..

    today at 11:30 est the NQ made a new high.. while the ES & YM did not. in fact they both made a double top..

    Would this indicate weakness in all 3 indexes??

    Would this be a short signal for anyone??

    Would you only want to short the ES & YM.. and not the NQ since it seems stronger or would you want to shor the NQ being that it may have overextended its move??

    As I'm writing this the NQ has fallen 3 points from the high..

    Hope questions are making sense..
  2. dbphoenix


    It's largely a question of probability. The YM and ES are both approaching the R of yesterday's high. The NQ is already past that. So is it more likely that the ES and YM will pull the NQ down if they fail this test, or that the NQ will pull both up?

    Aside from all that, there are breakout, test, and reversal tactics to be considered. Do you have a strategy for each? If so, which criteria are being met?
  3. Hey dp,

    I was not looking to take a trade.. my question was mainly to see if others use these scenarios in their trading..

    My style of trading would not create a signal with this setup..

    I'm not to crazy about playing breakouts simply because it calls for a much wider stop.. haven't tested anything along the lines of a breakout system though..
  4. Cheese


    My speciality is the YM.

    Broadly, does the YM, NQ and ES continuously mirror each other? Presumably they could not do otherwise?

    Who knows the comparatives on this?
  5. 40Deuce


    a lot of 'smoke & mirrors' in the NQ . . . esp in regards to the ES relationship
  6. Pabst


    The important thing to realize is that NQ trades at a much higher historical volatility than ES or YM. On market strength,managers increase beta in their portfolios by adding lower cap tech names, in market weakness bluechips display flight to quality aspects in relation to tech. Because of it's superior trending attributes position traders are better served by trading NQ over the other indices. Shorter time frame traders should weigh the small contract size of NQ versus the larger ES and YM when deciding whether the extra cost in commissions makes NQ a viable alternative. Typically all 3 contracts have similar $ ranges each day.
  7. if you had seen the TRINQ that day then you would have seen that the nasdaq is not probable to go much higher. the chart pattern also confirmed it. the es and ym still had some upside left. therefore, when the second leg up started, it would have been advisable to take the ym/es long this time, and not the nq. eventually the ym and es caught up with the nq, as expected, and then they all collapsed.