I will often look at other stock index futures for hints of what my trades will do. Here are two. Based upon what these two charts are doing, what would you expect the Dow futures to do? My instinct (bias) for stocks to reverse downward, as I mentioned in my last post, may have been mistaken.
Divergences May Form
However, if prices on these two indexes move only slightly higher, then divergences are likely to form on some indicators, suggesting bearish reversals. Divergences on the Klinger Volume indicators, MACD, or Bollinger Squeeze indicators, are signs of waning momentum and eventual reversal. Astute traders are always looking for them. In the futures markets, it take much more capital to push prices higher, while it only takes a lack of new buying interest for prices to collapse and head lower. I believe I learned this from reading John Mauldin's free weekly newsletter. (This fact also suggests that speculators don't have the power to send prices higher, as suggested by those who would blame traders for higher commodity prices. They ascribe to us too much -- undeserved -- credit. )
Divergences May Form
However, if prices on these two indexes move only slightly higher, then divergences are likely to form on some indicators, suggesting bearish reversals. Divergences on the Klinger Volume indicators, MACD, or Bollinger Squeeze indicators, are signs of waning momentum and eventual reversal. Astute traders are always looking for them. In the futures markets, it take much more capital to push prices higher, while it only takes a lack of new buying interest for prices to collapse and head lower. I believe I learned this from reading John Mauldin's free weekly newsletter. (This fact also suggests that speculators don't have the power to send prices higher, as suggested by those who would blame traders for higher commodity prices. They ascribe to us too much -- undeserved -- credit. )
S&P 400 Mid-Cap futures
The CME is eliminating the Russell 2000 Index futures following the Sept 08 contract. They are recommending that traders switch to the S&P 400 Mid-Cap or a few others mentioned on the CME website, alternatives to the Russell 2000 futures.
NASDAQ Index futures
