Posted By: Ilan Levy-Mayer Vice President, Cannon Trading Futures Blog
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Friday and today we saw “extra erratic” behavior in stock index futures.
Some attribute this to the liquidation of hedge funds on the equities side.
Others voiced their opinion to me that while in points the moves are erratic, if you translate the moves into PERCENT % of change, it is not too much different than a 18 months ago or so…we are simply trading much higher so the same % move equals more in terms of points.
Either way, for me personally it has been tough to read the markets as of lately, especially the indices. Couple of things that have helped are: using the MICROS so I can place stops/ entries and targets based on the chart and NOT my fear index. The other is diversifying with other markets, for example my read with 30 yr bonds and crude oil have been better.( I also started using the mini crude with some clients pending account size for the same reason above: “reduce the heart attack index”) . Last but not least, I PERSONALLY found out that with recent volatility the Emini Dow YM or MYM ( micro Dow) as well as the RTY and M2K ( mini and micro Russell) have been easier for me to read than trying to make sense of ES and NQ.
30 minutes chart of the Emini Dow YM below for illustration of the above comments.
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Posted in: Future Trading News