%% One profitable DOW deriVative daytrader said ''Dow is correlated to itself'' Great quote. Great/wise quote also\ ''you should learn more''......................................................................................................................
Good points, thanks. I just wanted to know what drives the occasional big shift from green to red overnight, and vice versa, absent news or earnings beats etc. Doing my due diligence to prepare for trading es.
The same thing that drives the futures shift from green to red during the intraday US session absent news or earnings beats. SSDD
Just like when USA opens as algos have backed up orders waiting so do the other countries as their market opens. Asia, Europe, London, US. Especially at the times when higher capital markets coincide with other markets, such as London and US. Of course the facts that different countries economies move on certain pieces of news that may not affect another country. Perhaps their currencies or a major commodity their country is built around is affected differently to a piece of news than the others. So many different variables from one market to the next.
Take it easy, OP clearly said that is not familiar with futures and always trade stocks. The question is actually brining some useful answers. Not yours by the way.
I think people that trade or study the overnight price action in the futures market (U.S. futures) will eventually navigate to markets and news in other countries that move the U.S. futures such as the CME while the U.S. stock market is asleep. Simply, the U.S. futures in the overnight price action is heavily influenced by what's occurring outside of the U.S. except when there are breaking news events in the U.S. at night. The last time I studied the overnight price action was during the protest summer of 2020...wild crazy overnight price movement in the U.S. futures markets, because there were so many riots...occurring in the U.S. wrbtrader
It comes down to if you think ES movement is about buying and selling, or it is all driven by MM algos. I specialize in this time and the movement is all algo admin. You can view if from different angles as it can be a replay of the US market hours for the Asian and European markets, a set up for the next US market hours or at times a correction for good or bad news. Depending on your time zone the US overnight period is worth studying as it has plenty of 'glitches' that you can make opportunities from.
%% PARTLY\ +MOST any low or lower volume market is subject to wild swings. Same reason why RE appraisers do 3 or more locations, as comps + not just one . Same principle , as even SPY post market with 7 million trades, which is low volume compared to SPY average day volume ................................................................. Leverage makes it more so