Trading Gaps with Projected Values

The good thing about correlated markets that open and close at different times is the potential for gap trades. The opening gap will occur when one market makes a decent move while the other is closed. Once that second market opens, you’ll most likely see a gap in the direction that the first market has moved. This article will show you how to project an open and therefore determine if a trading opportunity exists.

The Rolling of the SPI

You may be seeing some large numbers go through Time & Sales this week in SPI. These are positions rolling from March to June expiry. Typically this happens in the week or so leading up to the front month expiry. What you are probably seeing is large numbers going through Time & Sales, but not actually trading. This is 100% …

Market Immunity

Both SPI and bonds hardly moved after it was announced PM Gillard would keep her job today. The last leadership challenge was a positive for the market, although we did then have a leadership change. Still ‘political certainty’ is generally as positive for the market. All in all, it shows how the market can grow immune to things after it …

Trading the Obvious?

Today’s SPI and S&P are great examples of ‘buy rumour sell fact’. Bullish in the morning after pretty much all the press was expecting Yen intervention. Then there was the announcement (shortly announced to be false). The Dollar rallied, SPI didn’t (as it had already had a great run), then the Dollar fell back as it was announced there was …

Relative Stock Performance

It’s interesting to see how the Aussie market has performed compared with the US. The chart shows the S&P (black line) and the ASX200 futures adjusted for the change in the currency. From the recent peak, the S&P has lost 12% and the adjusted Aussie market has lost 27%. So why the difference? That resources tax? RBA minutes? Weakness in …