I show YM (Mini Dow Futures $5), NQ (Mini Nasdaq Futures), ES (Mini S&P 500 Futures) and TF (Mini Russell 2000 Futures) in the chart above. Through out 2013, no doubt Nasdaq is the best performer. However for the past week, Nasdaq seems to lose strength relative to S&P 500 and Dow. From the chart, we may say that the strongest of the four is YM.
Why I want to compare their strength? Obviously for trading reason. I hold a believe that if I want to buy, I will buy the strongest market. Conversely, I only wanted to short the weakest market. Usually strongest market will perform better if market trends up and weakest market will drop faster and bigger in magnitude in overall bearish environment. By capitalizing this strength differences in several similar markets (in this post all indices futures), I hope to capture the biggest and most profitable move.
DISCLAIMER: NO REPRESENTATION IS BEING MADE THAT ANY ACCOUNT WILL, OR IS LIKELY TO ACHIEVE PROFITS OR LOSSES SIMILAR TO THOSE DISCUSSED WITHIN THIS SITE, SUPPORT AND TEXTS. IF YOU DECIDE TO INVEST REAL MONEY, ALL TRADING DECISIONS ARE YOUR OWN. TRACK RECORD SHOWN IS FOR AUTHOR OWN LEARNING PURPOSES. THE RESULTS MAY HAVE UNDER-OR-OVER COMPENSATED FOR THE IMPACT, IF ANY, OF CERTAIN MARKET FACTORS, SUCH AS LACK OF LIQUIDITY. RISK OF LOSS IN TRADING FUTURES CAN BE SUBSTANTIAL.
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