FTSE, DAX, DOW Trading Ideas and discussions

dentist007 said:
dunno
but i think chronics rally tomorrow seems a decent idea
jpy seems strong today..not sure if there is a correlation
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Many thanks Dentist, am new to trading but does usually seem to be a rally after hours after a huge drop, speaking with very limited knowledge of course
 
newspreadbetter said:
Many thanks Dentist, am new to trading but does usually seem to be a rally after hours after a huge drop, speaking with very limited knowledge of course
Click to expand...

The one last night had me in tears, couldnt make it up :). as I closed a long position it wondered 50 points higer!!
 
chronictrader said:
Back briefly for the afternoon.10340 we all had that marked this morning. It was trend and horizontal res. PA suggests dax may see 10,000 possibly today or tomorrow

Zoom on the 4 hour chart from that major move down towards the backend of last August. PA / formation SUGGESTS price is coiling up for a big move this week or early next week. Could go either way, FOMC could be the catalyst. Strap yourselves in.
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We got our move. Where to now??? the "FTSE, DAX, DOW Trading Ideas and discussions thread" rally?? :LOL:
 
latest new addition gone for a new nic after no s/l and buried
Thought he seemed like a starting kinda guy as you say imho.


:D:clap:(y):cool::sleep::eek::devilish::mad::-0:rolleyes::-0
 
dentist007 said:
index manipulated down ready for China overnight news...imho
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Could buy in to that scenario, great news whilst he is in the US. Could be worth it.

I read an article recently, couldn't find it now, that most of the gains (few weeks old obviously) on the US markets occurred outside market hours, so the overnight theory is a fact.
 
NickBk said:
Could buy in to that scenario, great news whilst he is in the US. Could be worth it.

I read an article recently, couldn't find it now, that most of the gains (few weeks old obviously) on the US markets occurred outside market hours, so the overnight theory is a fact.
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Could you elaborate on "the overnight theory"?

I like making money when I am sleeping.
 
Its not a theory its a study over long periods ...


From BMT thanks to tigertrader and puma

tigertrader said:
:

from cxo advisory...

What part of the day offers the best stock returns? Does this sweet spot vary by day of the week, time of the month or calendar month? In their July 2007 paper entitled “Return Differences between Trading and Non-trading Hours: Like Night and Day”, Michael Cliff, Michael Cooper and Huseyin Gulen use transaction-level data to decompose returns for individual stocks and exchange-traded funds (ETF) into four time intervals: Night (4:00 PM to 9:30 AM), AM (9:30 AM to 10:30 AM), Mid-day (10:30 AM to 3:00 PM), and PM (3:00 PM – 4:00 PM). Using intraday price data for the period 1993-2006, they conclude that:

Over the last decade, overnight returns are strongly positive, and daytime returns are close to zero and sometimes negative. Specifically, during 1993-2006, average overnight returns for the individual S&P 500 stocks range (depending on the averaging method) from 0.028% to 0.048%, and average daytime returns range from -0.028% to 0.002%.

This overnight/daytime effect holds for individual stocks, equity indexes, futures contracts on equity indexes and ETFs. It is robust across exchanges, with the average overnight-minus-daytime return spread 0.18% for QQQQ, 0.061% for DIA and 0.068% for SPY. (See the table below.)

Average overnight returns are consistently higher than daytime returns across days of the week, days of the month and months of the year. Average overnight (daytime) returns for the S&P 500 index are positive (negative or close to zero) for all five days of the week. Overnight returns are strongly positive from Friday close to Monday open, reversing results from older research. For example, the average return from Friday close to Monday open for the individual S&P 500 stocks is 0.042%.

High opening prices that decline in the first hour of trading drive much of the effect. For example, the average return for the individual S&P 500 stocks during the first hour of trading ranges (depending on averaging method) from -0.012% to -0.036%.

The overnight/daytime effect is not due to portfolio risk (the standard deviation of overnight returns is consistently less than the standard deviation of daytime returns). Nor do timing of earnings announcements, the growth of ECNs or decimalization explain the anomaly.

The following table, taken from the paper, lists the average return (in basis points) for 14 high-volume ETFs during the four intraday periods defined above. It shows that average overnight returns consistently beat average daytime returns for all 14 ETFs. In fact, average daytime returns are negative for 12 of 14 ETFs. The table also shows that the first hour of trading is the least profitable of the four periods.

this study is a little older dating back to 2007, but more recent studies corroborate this one. in general, daytime sessions tend to be more mean-reverting or range bound, and overnight sessions tend to exhibit more momentum and persistence.
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