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Depends what you mean by "closely related". Every three months, when the
new front-month contract becomes the major focus, the Premium jumps by over
12 points. As the Quarter continues, the Futures Premium diminishes until
it meets the Cash Index upon expiration of the contract-- same as an Option
Premium decays over time.
There are many instances throughout a trading day where the premium expands
and contracts in relation to the Cash Index. There are times when it dips
below the cash price. If you've been "getting extremely good results" on a
regular basis, you've found the Holy Grail that has eluded traders for
decades-- but don't hold your breath-- I'm sure there are many here that
would take issue with whatever you claim to have discovered.
If you want to start a discussion on how well your techniques work and what
pitfalls you might encounter, you would need to specify exactly what time
frames you're monitoring (i.e. 5-minute, 15-minute, hourly, daily, etc.) and
what analysis techniques or indicators you're using to Enter and Exit your
trading positions.
___________________________________
At 11:10 PM 6/15/98 EDT, you wrote:
>Hello All,
>
>I am just trying to test and evaluate a method to take a position in S&P
>Futures on a Day Trading Basis ONLY based on comparing the chart of the S&P
>Future and its cash equivalent. I ve noticed besides they are very closely
>related following the rule to either
>buy or sell short when the "probable major" reverse trend has started, then I
>am just waiting for the S&P Index to follow that turn of the Future Index and
>then I would trigger the order. By doing this for the last couple of weeks I
>ve benn getting extremely good results !!
>
>Please any comments ?? Ideas ??
>
>Thank You very much
>
>Thomas...
>
>
>
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