# Dow futures predictive value?



## Gringotts Bank (15 August 2010)

I want to know if the DOW fututres, (as at 4pm on any Australian business day) has any predictive value for what the DOW ends up the next morning.

Obviously at 10pm it does, but 4pm?  Anyone studied this or have the data to do such? 

Thanks.


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## tech/a (15 August 2010)

Gringotts Bank said:


> I want to know if the DOW fututres, (as at 4pm on any Australian business day) has any predictive value for what the DOW ends up the next morning.
> 
> Obviously at 10pm it does, but 4pm?  Anyone studied this or have the data to do such?
> 
> Thanks.




Unless it's 100 ticks plus
very little


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## Gringotts Bank (15 August 2010)

Thanks.


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## Dracuu (16 August 2010)

I would lean to the side of no predictive value whatsoever. If you are simply talking about whether or not the dow would finish down if the dow futures were down 100 points pre-trading then there may be a little but I am not sure how you could use this in your trading.


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## noirua (16 August 2010)

I take it Gringotts Bank that you want information free of charge. The best way, but not as good as paying, is to visit one of the USA television business websites, such as:  http://money.cnn.com/data/premarket


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## ginar (16 August 2010)

Gringotts Bank said:


> I want to know if the DOW fututres, (as at 4pm on any Australian business day) has any predictive value for what the DOW ends up the next morning.
> 
> Obviously at 10pm it does, but 4pm?  Anyone studied this or have the data to do such?
> 
> Thanks.




Ive been doing a study on this for a little while and ive certainly found patterns that can help in a predictive way , ive still got a lot of work to do on this but i am certainly hopeful that this can be of benefit to my indice trading . from what ive learnt so far there is something in it to help define bias going forwards . not sure im willing to share it though as any edge is between me and myself but i wouldnt discourage you from exploring ;-)


not sure what you have at your disposal but these might help any exploration if you dont have live futures   

http://finance.yahoo.com/q/hp?s=^DJI+Historical+Prices

http://futuresource.quote.com/quotes/quotes.jsp?s=YM

fwiw im not necessarily focusing on dow futs at 4pm . ive been looking at the price action/pattern over the entire globex session


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## nomore4s (16 August 2010)

Might be better off studying how the movements in the Asian markets and currency movements during the Asian session relates to the US session rather then just trying to predict the DOW off futures at 4pm.

Just my


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## ginar (16 August 2010)

ginar said:


> Ive been doing a study on this for a little while and ive certainly found patterns that can help in a predictive way , ive still got a lot of work to do on this but i am certainly hopeful that this can be of benefit to my indice trading . from what ive learnt so far there is something in it to help define bias going forwards . not sure im willing to share it though as any edge is between me and myself but i wouldnt discourage you from exploring ;-)
> 
> 
> not sure what you have at your disposal but these might help any exploration if you dont have live futures
> ...





one more site to add to that list


http://www.liveindices.com/


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## wayneL (16 August 2010)

nomore4s said:


> Might be better off studying how the movements in the Asian markets and currency movements during the Asian session relates to the US session rather then just trying to predict the DOW off futures at 4pm.
> 
> Just my




Make that $0.04 

Even then I doubt there is any tradeable edge in it.

Even if there is, I bet it would be meagre. There are better and easier edges to explore IMO.


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## ginar (16 August 2010)

wayneL said:


> Make that $0.04
> 
> Even then I doubt there is any tradeable edge in it.
> 
> Even if there is, I bet it would be meagre. There are better and easier edges to explore IMO.




well im listening for the better and easier edges  . just give me a hint


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## nomore4s (16 August 2010)

wayneL said:


> Make that $0.04
> 
> Even then I doubt there is any tradeable edge in it.
> 
> Even if there is, I bet it would be meagre. There are better and easier edges to explore IMO.




I agree that there is no actual edge in it that will provide actual trade set ups but it can provide a general overview of the market and give clues as to the underlying strength or weakness in the markets which I find helpful but others may not find so helpful to their trading.


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## wayneL (16 August 2010)

ginar said:


> well im listening for the better and easier edges  . just give me a hint




Implied Volatility is my favoured study.


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## Gringotts Bank (16 August 2010)

Thanks.

I will have a look to see whether the larger asian markets have any influence on the DOW's close.

It's a funny situation where no longer the DOW drives all other indices.  World markets are so interconnected that they seem to drive each other in different degrees.  

Knowing what the DOW is going to do makes a big difference to my system.  

If anyone has suggestions as to how to predict the overnight movements of the DOW, one day in advance, binary style up/down, I'd like to hear form you.


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## Gringotts Bank (16 August 2010)

Tested shanghai SSE to see if predictive over 5 years of data.

Turns out it is very slightly predictive @53%.

In other words, when the SSE finishes green, 53% of the time the DOW will too.  Unusuable unfortunately.

AORD has no predictive value.


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## tech/a (16 August 2010)

> AORD has no predictive value




Suprising!


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## mazzatelli (16 August 2010)

Gringotts Bank said:


> It's a funny situation where no longer the DOW drives all other indices.  World markets are so interconnected that they seem to drive each other in different degrees.




Global VaR models have utility 
Though parametrics are better handed model down


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## nomore4s (26 August 2010)

Gringotts Bank said:


> If anyone has suggestions as to how to predict the overnight movements of the DOW, one day in advance, binary style up/down, I'd like to hear form you.




Do you really think predicting the overnight movements of the DOW one day in advance with any sort of accuracy or regularity is even possible?


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## ginar (26 August 2010)

nomore4s said:


> Do you really think predicting the overnight movements of the DOW one day in advance with any sort of accuracy or regularity is even possible?




You think not , therefore that must be the case , lucky i came across this , saved me lots of wasted time


...... cheers::sheep:


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## nomore4s (26 August 2010)

ginar said:


> You think not , therefore that must be the case , lucky i came across this , saved me lots of wasted time
> 
> 
> ...... cheers::sheep:




lol, Ginar.

Just because I don't think it is possible doesn't mean it isn't possible

Also the other question that needs to raised is what sort of accuracy the OP is after - e.g just something that says the DOW will finish either up or down or whether they are after something that gives a indication of how much up or down it will finish.

If it's just knowing if the DOW will finish up or down I would then question how would you best make use of that information to turn it into an edge you could use to actually profit from the market?
On certain days it could be useful but on most days you still would not know if the market was going to move up or down from its current levels (in regards to the futures).


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## nomore4s (26 August 2010)

Also on this, if after just the info of if the DOW is likely to close up or down the OP may be better off looking at testing patterns like the ones discussed in Prof Frink's thread.

IMO learning to understand the market in this way in conjunction with having a strong overview & understanding of the markets in general may provide some sort of edge but like most things in trading it is never as cut & dry as most would like.

Most fail in this game because they fail to understand that you are never going to get many smash you in the face, bash you over the head signals and it is  more about being able to read all the little signals and piece them together.


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