I have to admit that today ended up a more bullish day than I first thought this morning after seeing the market reaction to the Employment Situation Report. We have another close above today's Point of Control.
The Dow Transportation Index helped to hold up the broader market.
And the $TICK MA on the 15-minute chart is confirming the bullishness.
Charles
Charles, I noticed you use the Russel cash index. Is there a reason you don't use the TF for monitoring the movement in Russel 2K?
ReplyDeleteNo special reason.
ReplyDeleteJust remember that the cash market is the true market. Futures are the derivative of the cash market. Futures will trade with a premium or discount to cash depending on future expectations of the cash market, and the cost of money over time.
However, futures will follow the cash market. So, I like to see the strength or weakness of the cash market relative to the futures. If the futures overreact or overcompensate relative to the cash market, it is the futures that eventually will come back into balance with the cash market.
After having said that, I'm sure that in some instances the cash and futures may meet half way, if they temporarily get out of balance relative to some historical average of premium or discount.
Charles