I have been looking into preopen futures and it seems that most index futures be it the dow, sp or nasdaq are usually reversed during the market hours. Did anyone look at some stats or study deny or confirm this? who are the traders who actually trade the pre-open index futures? they are not the most liquid markets...
This is an interesting question. I don't have any stats on pre-market index futures. If it is the pre-market YM, presumably you would expect this to correspond to the London stock market until NY opens.
sometimes i find the er2 contract has some potential in the pre-market.just because there is a spread, i find anyway.
Those opening gaps (ES) when the pit opens are always interesting. I tend to watch for "most" opening gaps to be closed. Today i woke up and saw the SP up 5 handles, could not gleam any news for bullish reasons that stood out. After the pit opened the ES went up to 1265 but failed to match or take out the globex high of 1266 set about 0400 et. The low before 1265 was 1263, your first low spot ot the day.That move to 1265 and a failure to take out the Globex high was the first clue to get nervous if long, the mkt then went down to 1261.75 and then back up to 1264.50 "BUT" failed to even rehit the 1265.00, thus it made a lower high, then it went down and made a LOWER LOW at 1261.00 ( these are classic reversal clues), but we want a THIRD lower high before we look for the THIRD LOWER LOW to get short. Remember our bias was to get short because we were skeptical about the gap up open, if we can close the gap the weak longs from overseas will send us some cash so we can buy their cars....HA...love those guys.... Ok, back to the trade, where were we?...OK, we now go back up to 1264.00 and again make a lower high. ....now you get the trigger finger ready to go short at either one of the previous lower lows looking for the next lower low to be lower and then you expect the gap to be filled. Your STOP would be at any one of the previous 3 lower highs, depending on your particular flavor of risk. It went something like that this morning (it is easier to watch a chart and trade it rather than retype the action later). With that action and the nice bottoming consolidation later in the day, then a upside reversal once 1257 was broken to the upside (a 2 bar reversal off the bottom), retested the breakout but failed to make new lows. ....The shorts look like they covered and the mkt rose into the close, no real reasons just playing the screen..... PS, I do not trade the Pre-open, to thin and gets whippy, i prefer to wait for thr big dogs to start barking once the pit opens. I do not trade Globex, the STOP server with such thin volumn is not for me, to many fat finger errors that early. PSS, a reminder, i trade the 5 minute chart.