Someone mentioned that the S&P and DOW trend together more than the s&P and the nasdaq.I respectfully disagree. I have been watching the indexes almost everyday for eight months.In my view(take it with a grain of salt)the s&p and nasdaq are more closely related.Today is a good example. At first glance the dow and s&p were up and the nasdaq was down.However,view a chart of both the mini nasdaq and s&p and you will see what I mean.The web site is: http://www.ino.com Go to the index section.The charts are similar,but one started much lower.Sometimes there is a negative divergence,but the charts speak for themselves.
Who "mentioned" that? I just did the calculation for closing data from Jan 01 to today. Correlations: S&P/Dow = .7827 S&P/Naz = .9549
I agree with both of you. I trade ES exclusively and generally ignore the Dow but pay very close attention to NQ. NQ often leads ES by a tick or two, and the spread between NQ and ES is generally a very good leading indicator of ES direction. Especially helpful in narrow trading ranges --- the chop/slop we've been seeing a lot of recently.
Since the S&P charts seem to also mirror the NASDAQ, is there any chart (NNAZ futures or(?) that would precede the Compq by a minute or two? Something to help know the next few minutes of the NAZ market direction that is? Would certainly help a newbie like me. Thanks.
Just how do you calculate the correlation of something? I have some stocks that I have no idea what sector index they follow, would love to be able to calculate this . . .
There's two ways. 1) Go to http://www.market-topology.com and type in the ticker. This will give you the 5 most and least correlated stocks or tracking stocks to your stock. It won't do indexes. As an example click here to see the correlations for CIEN: http://www.market-topology.com/cgi-bin/createminimap.cgi?market=NY&imgtype=checked&name=cien 2) Go to finance.yahoo.com to get the historical data for any stock or indexes. You can use daily close data. Put that data in excel and use the correlation function for both sets of closing prices. It will give you a value from 0 to 1. 1 is the highest.
the fact that the SP has been moving towards tech over the past few years has been well documented (there have been stories in major business weeklys) case in point, the entry of PMCS just a few days ago the head of the committee that chooses new entrants to the SP was on CNBC and they had a few examples of entries right at the top for techs and right at the bottom for the exiting ones ofcourse, the guy mumbled something but it was hilarious to see that once a stock went in it tanked and when it exited (usually old school) it rocked I think JDSU was one they cherry picked right at the top a great contrarian indicator imho
Genebort ---- Definitely follow NQ (e-mini futures: NQ01U or NQ U1 depending on your data provider), it leads COMPQ by a few seconds to a minute or so with great accuracy. Virutally any move of significance is clearly telegraphed by the futures.