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Strategies & Market Trends : Jim's Nasdaq100 Special as a basket. -- Ignore unavailable to you. Want to Upgrade?

To: Matthew L. Jones who wrote (1137)	8/24/1999 11:08:00 AM
From: Stoctrash	Respond to of 2103

Yeah it makes sense...if they see the Sp futures move to a big Prem...they know 99.9% of the time the NDX will follow higher as well.

To: Matthew L. Jones who wrote (1137)	8/24/1999 10:20:00 PM
From: John T.	Respond to of 2103

QQQ-NDX DISCOUNT - Jim as we discussed, I am posting a copy of my email to you regarding the QQQ-NDX discount. I've also uploaded a copy of the 5-minute bar chart of the QQQ-NDX discount to my personal web page: home.swbell.net Here's a copy of the email: I read your post about the QQQ lagging the NDX and I thought I would send the attached 5-minute bar chart to you. The chart shows (top to bottom) the QQQ-NDX Premium, the NDX and QQQ. The QQQ-NDX premium is a composite security that I created in MetaStock. It tracks the difference between the QQQ and the NDX. I gave the QQQ a weight of 20 and the NDX a weight of 1. As you can see, the QQQ is usually at a discount to the NDX. I used the 20-1 weighting because when QQQ was initially created its value was approximately 1/20th of the NDX. I am not sure if the 20 to 1 relationship still exists. The following is a quote from a NASDAQ brochure about QQQ: "As with any traded security, prices also will be affected by market forces, including supply and demand and other factors. Due to these factors as well as other factors including required distribution for tax purposes or the sale of securities to meet Trust expenses, the initial 1/20th relationship is not expected to persist indefinitely." I was interested in the discount between NDX and QQQ, so I began to collect data. I only have 7 days of data so far. The only conclusion I've reached so far is that one should try to buy QQQ at a discount and sell at a premium. After looking at the chart, I should probably change the name of the composite to "QQQ-NDX Discount." If you have any thoughts on this matter, please let me know. Thanks.