Hi CFerret, My take on this situation is because futs are derivatives and have no choice but to move with the cash. All that says though is that it is moving up but there is less buy motivation than selling motivation. Sentiment is negative at that point in time. Maybe the most of the volume is from other timeframes who still see a downside bias and this is an opportunity for them to sell it. Never know. But remember these are derivitives unlike stocks. Of course, that can change when enough traders decide to act. Best regards, MK
Now it seems that I begin to understand what you mean by the "boundaries for the ball" in context of ranging market vs. strongly trending (such as 27th example in your text).
I came to the same conclusion that this strangeness is because futures are derivatives and to say so "don't move independently" from their underlying. But stock777 now says that stocks are derivatives of futures, so new question arises "what was first an egg or a hen".
Trading indexes can be difficult for some. the less myths that are used the better. The bottom line is where the conclusions are stated. The large picture is that you must be very thoughtful and rational about how to make money trading. Equities make up the cash indexes and the futures indexes serve the financial industry as insurance. I trade to make money as a parasite of both. I make money on stocks by gleaning prifits from the results of big money imbalancing the value of high quality equities. When high quality stocks are sold off for whatever reasons, their short term undervaluation presents a simple opportunity to make 10%or more in 3 to 4 days. For future indexes, that depend on the cash, I simply have to use timing to make what is offered, long or shot, from a neutral bias. The dependancy of the futures index on the cash index is not an important matter with respect to making money. Timing is what is important. And the other thing that is important is knowing how the futures indexes work. It is unfortunate that futures index trading is largely a zero sum game at any moment in time. So my selfish interests are there and I do always find someone to take my trades. As we see the independent cash index moving, it is incumbant on futures index traders to trade the their dependent market effectively and efficiently. Luckily for retail traders, we can watch the pros and profit from their trading contraints, etc.. Heavy scalpers, in particular, have constraints because of the size they chose to use. We get to see how the futures index relates to the cash and, in particular how "control" of price occurs. The view of the timing of what happens is simply a sequence of rapid events unfolding. The futures index I trade lags well behind the cash index and the futures index that I monitor to be able to trade my lagging index. All of this is a very fortunate circumstance for me. It allows me to be positioned ahead of the heavy scalpers, the topic of this thread. I see them come into the game and they are controlled by the minority at all times. The minority mistakenly takes their trades as the minority continues to evaporate. The continuing near absense of traders facing the money coming into the market is what keeps the price tranding until the wall is reached that is too large to surmount. The heavy scalpers soon leave (see internal trend patterns and formations) and if high velocity scalpers, they trade the "box" of the pattern (See ACV). How the wall appears in a direct consequence of those who build the wall by having the capital on the sidelines to build it or by having the need to protect against greater losses as a result of their exposure. These people may be founding their views as BOTS or on the limits of the movement of the cash indexes or futures indexes. Who cares, while trading? The wall is just a place to take profits and put on another trade; it is not an internal pattern, it is simply the failure of tte trend to continue (the minority becomes the majority and throttles any more progress).
ah Jack nirvana. the goal of trading - the thought that drives all other thoughts. The thought that drove me to find a few edges after my initial edge wore off. Leading indicators that help me get in and then I flip them out when my little impluse move is over. If only it were still so easy. Care to show it being done.