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Let me provide some evidence - below are graphs of the MHI and HSI at roughly the same time.

Notice simultaneous tick by tick trading. Also notice the dip in the middle of both graphs, which just happended to be the low of tonight's session. Notice also the volume those lows attracted. The volume is large for both the MHI and HSI (60 and 140 contracts respectfully). This volume was the start of a 500 point trend!

But more importantly, these volume spikes appeared on my screen at exactly the same time, on both indexes. If you are a professional with such deep pockets, why even bother trading the mini at exactly the same time?

Call me paranoid if you want, but I would really like to know who or what is really in control of our futures markets. Because surely human trading would lead to far more variable trading.

Or is there something else that leads futures markets. Like the 24hour US bonds, or the 24 hour YM or ES? I think the answer would give you an unbelievable edge.
 

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Broadway said:
So to take this one step further, how many trades on the index futures across the world are computer generated compared to human generated? Are software programs just picking up the lagging indexes, or is there more to it? When we trade, are we trying to take money from other human traders, or are we up against computers? Is it possible for human traders to outthink these computers?

In memory of Arthur C Clarke and Isaac Asimov I have to ask the following question.

'Are humans really in control of index futures any more?':eek:
Click to expand...
I saw some stats somewhere and IIRC about 60% of index futures trades are program trades.

As far as indices matching each other. The answer is arbitrage players (often computers) will bring any discrepancy in value very quickly into line.
 
Broadway said:
I'm guessing the answer lies in professionals running software programs that bring any straggling or deviating indexes back into alignment. I seriously dont believe that humans can be responsible for the split second realignments that happen so frequently every minute across multiple indices. It happens too fast.

So to take this one step further, how many trades on the index futures across the world are computer generated compared to human generated? Are software programs just picking up the lagging indexes, or is there more to it? When we trade, are we trying to take money from other human traders, or are we up against computers? Is it possible for human traders to outthink these computers?
Click to expand...
Why don't you ask TH? After all, he is a machine. ;)

It would be arbitrage programs and bot trading. A lot of these automated systems will hit both contracts at the same time. So it keeps them both in line.

You have related indices like the ES and YM, which have a correlation, but not exact. So trading one, without charts in the other is kind of foolish. You have to trade either with both in mind.

I don't think it is about out thinking computers etc, just a matter of being aware of when they are active. But it's the same with anything, volume is usually the key.

P.S. - Wayne stole the words almost identically out of my mouth. Prick. Lol!
 
Thx for responding.

I have to admit that the closer I look at index futures, the more I find myself studying volume rather than price, to look for clues to future moves.

eg. during a 20 minute period between 5.40pm and 6pm there was a consolidation pattern (a down pennant) on the HSI. At the time I didnt know if this was going to break up or down. But in hindsight, I should have noticed 3 similar dips to the graphs above, that showed a down move, followed by an immediate rejection of price with large 'ask' volume.

Ofcourse at 6pm it broke out going north in a hurry, leading to 500 HSI points (a 2% move on the HSI which is not to be sneezed at).

As Motorway would put it 'TEST RESPONSE TEST RESPONSE'..

(a light bulb flashes on above my head):D - 'I get it now!!'
 
Have a look at http://www.indexarb.com/
They provide a gauge on whether program trading is occuring based on the difference between the actual index spot price and the futures price. If this value exceeds some threshold then you'll get some percentage likelihood of institutions using their power to run buy or sell programs which can exert an influence on prices.
 
I would say with the HSI and The MHI its a bit of both, man & machine. IF you put the two DOM's next to each other and have a fast enough finger(;)) you can look at the HSI and trade the MHI. When a big boy with a linked MHI program or BOT starts a run they clean up both contracts automatically. But if its a manual player pushing the HSI around you have all the MHI punters trying to beat each other to the crumbs. either way it creates equal prices. That's why arbitrage plays are getting thinner & thinner.
 
Trembling Hand said:
I would say with the HSI and The MHI its a bit of both, man & machine. IF you put the two DOM's next to each other and have a fast enough finger(;)) you can look at the HSI and trade the MHI. When a big boy with a linked MHI program or BOT starts a run they clean up both contracts automatically. But if its a manual player pushing the HSI around you have all the MHI punters trying to beat each other to the crumbs. either way it creates equal prices. That's why arbitrage plays are getting thinner & thinner.
Click to expand...

Back before the HSI went nuts last August, there were many times during the day where you could get a lead on the MHI by watching the DOM on the HSI. Was a great way to pick up a few $$ at the start of a session before moving onto trading the HSI. Not sure how much it happens these days though.
 
I got another interesting fact about the HSI DOM.

On March 17, at 130pm, most of Asia made an important low. (check K200, sgxnk, stw etc). And has risen about 15% since then.

At exactly 1.34pm the HSI dom bid column showed 512 contracts.

Normally shows about 1-10 contracts.

Talk about ringing a bell, if only I'd listened and held..:mad:
 
new FTSE target c/- Updata. Still a lot of work to do mind, need to take out the downtrend line & get a double top breakout & clear the overhead congestion (gee I feel knackered just typing that!) but potentially sits with the Wave 4 that some of the pro-counters have been calling this correction

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http://www.bloomberg.com/apps/news?pid=20601087&sid=afSLOAm2FaFU&refer=home

China's Shanghai Composite Index Surges 9.3% on Trading Tax Cut

April 24 (Bloomberg) -- China's stocks surged, sending the Shanghai Composite Index to its biggest gain in more than six years, after the government cut the tax on equity trading to stem a slump that erased $1.7 trillion of market value.

The Shanghai measure rose 9.3 percent, the most since Oct. 23, 2001, with more than half its members climbing by the daily limit. The government stepped in to boost the world's fourth- largest equity market two days after the benchmark index sank to less than 50 percent of its October record amid concern earnings growth will slow and share sales will overwhelm demand.
 

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