Has anyone else noticed that the volume and volatility spikes at 8:30 EST are getting bigger and bigger? This weird behavior extends beyond the ES to the YM, NQ, and the premarket trading of Spyders, Diamonds, etc. I always thought these premarket spikes were some form of program trading related to European markets, but now I am begining to wonder what is up? The number of contracts pushed through in just 2 or 3 minutes has lately exceeded the normal volume of 2 or 3 minutes during market hours. Weird. Anyone know anything?
If this is a serious question you need to back away from the computer,carefully turn it off and find something else to occupy your idle time before it takes all your money.
Whatever it is you are sniffing you might want to close the cap now and go to sleep. Things will seem much clearer in the morning.
Economic numbers come out at that time and if this is "news to you" than you need to redo the trading plan, but yes the moves and activity have increased due to the news sensitive markets we are in with all these pending unanswered credit problems and rate concerns that change with each data point. Great for traders...not so great for investors.
Well I thought this was a site for experienced traders but perhaps I was wrong. There is news constantly, some good, some bad, usually the market has discounted the news and trying to play the news is a coin toss. That is why it is a game for the inexperienced retail trader. Small retail traders watch CNBC and try to play the news and usually get killed. If you are an exception, congratulations. Small retail traders do not trade over 20,000 ES contracts in one minute. Check out the ES on August 1 at 8:30am EST. Look at the volume spike. This is big time institutional trading, probably arbitrage of some flavor. What makes the moves I am talking about unusual is the size of the play for the time of day. Normally the big boys want to lay off the other side of the trade within seconds if it is arbitrage, which is what this kind of move would signal if it was during market hours. After all the pros really are not in the business to take risks. (That is why the mortgage mess caught so many of them, they didnt realize they were actually taking any substantial risk.) Anyway, these recent massive plays look exactly like either: a) front running, which is of course illegal b) programing trading, but in that case where are they laying off the other side of the trade? c) or manipulation by someone really big, like China. Note that the move at 8:30 was UP, not down, despite todays bad news, and moved the ES about 10 points in about 70 seconds. Not bad when the usual daily spread on the ES is more like 15 or so. This same magnitude of move occured in the NQ and the YM. If all of this is "news to you" you might want to check it out.