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That's a wild dissertation.
What doyathinkabout this:
As we know there are certain values in the SP-PREM that kicks off program trading --- you can see daily buy and sell levels at
www.programtrading.com
More experienced traders have told me that program trading techniques are not as useful for trading SP eminis, as they are for certain stocks that are being concentrated on by program traders (bigger, more certain moves). Any comments ?
Anyway:
1) Does one concur that SP Futures leads the NYSE, or vice versa ?
Lately I've been noticing on 1 min charts how more often SP futures price jump will lead the NYSE TICK by 10 or 20 seconds or more. I'm curious if big money is entering orders first on SP Futures, or if exchange / data provider delay is the reason for this phenomena.
Most longer term mechanical breadth systems for trading SP's are usually based upon the theory that NYSE Adv's and Decl's are driving/supporting the SP futures. However, what if the SP Futures in Chicago are actually driving the NYSE, since most successful stock traders are watching the SP Futures intensely.
2) Obviously, the SP-PREM or PREM plays a big part. A close look at today's 1 min ES to 1 min SP-PREM shows that at 9:05 CST the PREM hit today's program Buy levels (and TIKI hit +24 at 4 min earlier).
Again at 10:42 CST SP-PREM hit the program buy levels (and TIKI hit +24 at 3 min earlier).
I'm curious if anybody has any experience with using program trading, PREM buy/sell levels, TIKI, etc. and would share it with Omega listers ?
On Tue, 22 Apr 2003 13:55:07 -0400 , "Bilo Selhi" <biloselhi@xxxxxxxxxxx> wrote:
>program trading is what moves the market these days...
>note that definition of programmed trading is broadened now, not only index futures / cash arbitrage but
>any large volume trades too in cash market or futures markets.
>initial market move was on rumor that sadam was captured...so i do not see it as program trading, more of a short squeeze,
>but i see why it can be confused with pr. trading... also there is no definite way to determine if the move was pr. trading
>or panic or squeeze or large buy order, but with time you can differentiate.
>pr. trading raids usually better visible in the afternoon, around 1,2,3 pm and at half hour intervals.
>sometimes in the morning too but not straight from the open, mainly because those guys go in only after they figured out
>days trend...
>the way it goes is like this: a computer program detects dominant trend for this day + looks for conditions to
>do the raid, then the raids come they are fast, furious and they don't take no prisoners, aka there are no pullbacks to get out on
>and usually program trades create extra momentum because of panic and because of trend traders pile up on it.
>it's the easiest way to make ( or lose ) money, if you get caught into it you have to get the f...k out asap and get with the
>program
>and you gotta ride it all the way...
>also they operate within the dow curbs, so sometimes they'd be sitting all day waiting for the lift and then they go, those
>trades are very easy to time if you know how the game is played.
>
>in my opinion markets should not have curbs...
>the main argument is that large funds can not move in an out fast enough, this is bs.
>large funds are capital monopolies, often having < 10 employees but "managing" billions for investor who do not
>realize that these guys are dinosaurs, they don't do much to make money... they put money in and wait...
>now, if curbs were thrown away these "managers" would go out of this biz very fast due to the fact that they will
>not be able to sustain real volatility ... this would force investors
>to look for smaller companies to invest with, those who could move in and out of the markets faster and actually return
>something back instead of just parking the capital for a long haul and losing it...
>bottom line is that if curbs are done away with, this would force more even distribution of capital amongst smaller and more
>efficient money managers,
>will increase liquidity because money managers will be forced to trade more often to survive...
>this increase in liquidity in turn would stabilize the market...
>
>so in my opinion program trading should be allowed unlimited, curbs should be done away with, insider trading should be allowed
>but gov. should punish more those who start rumors... and ideally there should definitely be a limitation of max capital allowed
>under
>management for large firms to fight capital monopolies like Goldman etc... other spiderwebs...to kill manipulation
>and you should have a license to trade stocks or futures, to participate in financial markets, because markets are important
>for the economy and overall global well being... but instead we are turning into a f...cking 24 hour casino where anybody
>can gamble with as little as 500 bucks. think about it...
>
>this is all ideal fair market...
>now in our market: we have trading limits, capital monopolies, "insider" trading is prosecuted so that small fish eat food of the
>big fish
>because big fish most of time trading on inside info but can not be had for it... capital monopolies are allowed... market
>manipulation
>is allowed... all to favor those large capital holders
>that's why we are in the market mess now with trillions in losses for majority of investors!!!
>
>bilo.
>ps. another interesting point is this: index futures ( SP complex ) were created in 70s to help hedge portfolio losses, aka to help
>stabilize the market,
>aka to help those large capital monopolies to survive, right?
>now, ask yourself a question: did having index futures really help markets to stabilize in the 80s and 90s...and did it help contain
>losses on portfolios???
>it certainly does not look that way... instead index futures brought on program trading which increased volatility ( 87 crash ),
>rampant speculation
>( index future contracts are most popular amongst gambler type investors and is now an industry in itself ) , rampant manipulation
>( by dominant players such
>as Goldman spiderweb ) through futures market such as SP... derivatives on derivatives markets which are have no economic value...
>and overall increase noise and excess volatility ( sp futures, qqq ,etc have highest noise and volatility level indicating
>higher speculative level ) ... and finally the crash of 2000.
>so instead of being an apparatus for stable markets, index futures became part casino, part market control mechanism ( for a few
>dominant players )
>funny ain't it... looks like the devil got us all by the balls.
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