POLL: Very short term traders, do you consider the cash index in your trading?

Discussion in 'Index Futures' started by Thunderdog, Dec 15, 2008.

Do you use the cash index as a decision criterion in trading index futures?

  1. Yes

    8 vote(s)
    30.8%
  2. No

    18 vote(s)
    69.2%
  1. Personally, I do not use the cash index as a decision criterion in my trading. I am just wondering approximately what proportion of traders here use the cash index to help determine their entry and/or exit points when trading index futures.
     
  2. TD, if it were anyone but you asking, I would figure it was a pro fishing expedition to fade paper. I am a firm believer in using $NDX to time NQ trades. That said, is my "yes" vote a fade?
     
  3. None of my polls has an ulterior motive. I am genuinely curious, since conventional wisdom suggests that the cash index provides useful information, but I have not found that to be the case in my own trading.
     
  4. I use the Dow cash sometimes ... just seems to work better for me.
     
  5. In what elements of the cash chart were you looking for better definition?
     
  6. I do not use the cash in and of itself. However, I do use cash minus the futures to obtain a certain result. Subtracting the premium then yields value when carving a market turn.

    - Spydertrader
     
  7. I remember having looked at both the cash index as well as the spread a few years ago and had compared them with the futures index as one would use an indicator, looking for either a lead (not likely) or confirmation. I did not reliably get either by the time of my usual point of entry. I have not since revisited the cash index. Am I missing something?
     
  8. What Spydie says is correct. But he has the advantage of a faster update rate for $SPX. At $NDX's 15 second rate it has no value. And unfortunately, calculating a faster $NDX takes prodigious BW and speed resources. I use $NDX because the timing of S/R are clearer than on an NQ chart. Doesn't help you because you don't play S/R.
     
  9. volente_00

    volente_00

    Yes. I started using it a long time ago do to premium erosion in ES.
     
  10. A follow-up question for all the respondents who use the cash index in some manner to time their trades: Is the incremental value provided by the cash index better than 50% reliable? Stated differently, is the additional information provided by the cash index better than a coin toss? If so, how much better? Ballpark, of course.
     
    #10     Dec 17, 2008