if you trade ES exclusively then what is the value of monitering YM, NQ, or ER2

Discussion in 'Index Futures' started by chewbacca, Jul 9, 2007.

  1. i trade es exclusivly but moniter nq and ym as well.....i have monitered es exclusivly in the past and i think if you trade one market then monitering other markets generally just adds to complexity, confusion, and excitement and remember good trading is simple and boring.....i see very little value in it.......sometimes one market dramatically leads another and somethings it lags dramatically behind - i see no value in it.

    some say that ym leads es and whatnot......and i don't want to get in to that, but my view is that it is an unsubstantiated claim.
  2. There will always be exceptions and divergences. I see the ES leading the YM more then the other way around. The ES has atleast 4x the volume of the ym.

  3. You need to be monitoring more than just stock index futures. Everything is correlated. Interest rates, currencies, etc
  4. I like to watch for pattern divergences
    between the different Index Futures

    Today, July 9th, the ES made a minor intraday double top at 1545 at 7:25am PDT but the ER and EMD did not and were a lot weaker...

    Whereas the NQ made a minor higher high...

    that coupled with Vol Diff readings.. helps to get kinda of (no holy grail) get a handle on the day's action up to that point... and so on through out the day..

    <img src="http://www.enflow.com/p.gif">
  5. jtnet


    BS, i dont think you need to monitor anything else, just one market as all you need, only thing you need to be aware of is just Fed Meetings and expiration.

    it changes every day. if everyone used a market as a leading indicator, the laggered would become the leader.
  6. also watching the YM versus the ES... you can get a feeling about the weakness / strength of the industrials (YM) versus the weakness / strenght of the techs and the financials (ES)...

    <img src="http://www.enflow.com/p.gif">
  7. jtnet


    why not watch the eur/usd as well?or crude?
  8. I have found the pattern divergences and convergences in the Intra market spreads (index futures vs other index futures) to be good in giving a indication (not an absolute) of the strength of weakeness in the trend or non trend direction of the ES... but have not looked into Inter market spreads (ES vs Crude, ES versus $index)

    I have all four (ES, NQ, ER, EMD) index futures up on the screen at the same time and found by watching the pattern interplays and strengths / weaknesses of them against each other to be quite helpful...

    <img src="http://www.enflow.com/p.gif">
  9. As long as we aren't talking about if one trading instrument leading another trading instrument (stuff that's not part of my methodology)...

    There's a lot of value in watching other key markets while exclusively trading ES or exclusively trading anything else.

    I've been doing such for +15 years.

    In a few words...

    Intermarket Analysis.

    Yep, you can keep it simple and make it boring too but that's a perspective of the person using it and such may not be shared by someone that doesn't understand nor uses it.

    With that said, you've made it obvious its of no value to you so why are you interested in why its of value to others???

    Here are my list of key markets I watch when I was exclusively trading ES:

    * U.S. Dollar Index

    * Treasury Yields

    * Eurex DAX

    * AMEX OIH and XLE (OIH and XLE replaced watching NYMEX Light Crude Oil CL because of too many data problems)

    * COMEX Gold GC

    * CBOT YM and CME ER2, ES, NQ

    The above is the complex stuff.

    Below is the simple stuff.

    * SPY and SPX.X

    * Market Breadth Index

    Thus, when I'm using my desktop systems with several monitors of screen space...

    I usually used the complex stuff.

    However, when I was trading ES via my laptop...

    I used the simple stuff due to the limitations on had on screen space and the fact I was trading elsewhere and not in my home office.

  10. As a follow-up to my post and the post by EdgeHunter...

    Most traders I know using Intra or Inter Market Analysis usually have been trading for many many years along with having traded other key markets.

    Thus, we tend to see more easily the relationship between different key trading instruments because what occurs elsewhere in the world has a direct impact on ES or any other trading instrument.

    Once again, its not an issue of what's leading what.

    That's the point.

    The market isn't just ES and if your a price action only trader (no indicators) that's dependent upon the market itself for trading clues...

    You need to look beyond ES for help in trading ES for any longevity in this business.

    Regardless, if your methodology works well for you...

    Keep using it because there's more than one way of profiting in the market.

    #10     Jul 9, 2007