How can some stocks lead the futures?

Discussion in 'Trading' started by BoyBrutus, Apr 30, 2006.

  1. People use the futures as a leading indicator to trade stocks.

    But some stocks seem to lead the futures. They bottom and reverse before the futures turn up and the reverse applies on tops. This is not always true as sometimes they lag the turning points and this divergence is easy to trade.

    It seems traders position themselves before hand to capture the next reversal and ride the rally in the futures. This seems to happen at various times throughout the day and for various duration. But clearly the stock has some capitulation volume at these points and reverses before the futures.

    My question is how do these stock traders/ market makers know that a turn in the futures is arriving well beforehand ?
  2. Timing the market using reliable and repeatable signals, so far in trading, is largely an untapped opportunity.

    Many of the understandings (accepted ones of the public and industry) of the markets serve to close the door on the opportunities of which you speak. You will notice in many of the posts to follow yours how the basis of this blockage is derived.

    Once a person does find out, as you imply and infer that everything does not happen at once, the basis of determining what you inquire about is established as an a priori truth. Not many people follow the path to the high utility signals that work for this.

    One of the best ways the handle this is to just join the people who do it. (See Larry Harris) The better way to deal with making an association is through publications on the topic and then determining their veracity.

    The results are astounding when compared against the results of those using conventional understandings.

    One jumbled source of this prime information is areas where myths are debunked.