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Several times this year, I've been trading the NQ and had a sell
signal kick in that was less than 10 pts from the limit and each time
I balked on taking the trade. To my surprise, the NQ blasted thru
the limit without hesitation. These were on days when the NQ had
not yet hit the limit.
I've gone to the CME site and read the rules but the explanation is
fuzzy at best. It seems that if the ND has already hit the limit even
though the NQ has not, that that is the end of the first limit level for
the day--even for the NQ and therefore the NQ is free of the initial
limit restrictions even though it never hit limit. Therefore, NQ traders
need to watch both markets for limit hits when trading.
If anyone has a better interpretation of this somewhat vague explanation
on the CME site or can confirm mine, I'd like to hear it.
Same rules apply for all CME index futures.
dbs
Bilo Selhi wrote:
> once sp/nd reached limit down move
> all trading below the limit down price
> is not allowed. you can only bid or
> offer above the limit down price.
> trades can take place above the
> limit down level only for the duration
> of limit down determined by the exchange.
> if it stays locked limit down means
> nobody is willing to bid higher ( buy it )
> and nobody is allowed to sell lower ( sell it ).
> means some traders will hold their bids and
> offers below the limit down move but no
> trading can take place.
> if buying picks up ( interest ) at limit down
> level you'll see some trades above as there
> are some takers for the offers and bids can
> start rising again and
> maybe the market will pick up from there.
> if it stays limit down like today, beware...
> there are no bids above and no one is
> willing to take offers above and market
> will likely to fall thru when it's
> unlocked. in that case usually panic starts
> creeping in, local pull or drop the bids
> and offers drop...
> bilo.
> ps. today the market was weak since
> nothing could hold it down, curbs or
> nd limit or sp limit... the only one thing
> that saved the market from the second
> limit down was that time ran out...
> it was pretty much known that we will
> go limit in the sp today... took a while...
> limit in nd is not important anymore since
> we get there once a week a least...
>
> ----- Original Message -----
> From: Keith <Keanjo@xxxxxxxx>
> To: <omega-list@xxxxxxxxxx>
> Sent: Wednesday, December 20, 2000 6:09 PM
> Subject: SP lock limit bounce?
>
> > Can someone tell me why the S&p bounces off of a lock limit level
> > sometimes without locking while other times it will lock like today.
> >
> > Keith
> >
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