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Strategies & Market Trends : Classic TA Workplace -- Ignore unavailable to you. Want to Upgrade?

To: John Madarasz who wrote (43901)	6/28/2002 9:26:39 PM
From: UnBelievable	Respond to of 209892

It Points To The Extent That The Advances Were Futures Led The program trading statistic that is reported I believe refers specifically to Index Futures / Stock Arbitrage trading. This type of trading occurs when the Futures are trading materially above fair value and the programs buy the stocks (selling the futures) for a risk free profit. The reverse also occurs when the futures are trading materially below fair value. Last week the futures were trading above the program buy level much more frequently than usual. I guess it means that either someone with deep pockets thinks the market is cheap now and is buying the futures and expects to sell them for a profit in the future, or someone with deep pockets has an interest in keeping the market at levels above which it would otherwise trade, and is bidding up the futures, knowing that this will cause the program trading to kick in buy stock and thereby keeping the price up. I would offer an opinion as to which was the case but I already have been called cynical once today. <gg> You can monitor the difference between the SPX futures and SPX under the symbol $PREM. While there is not a similar symbol for the NDX I have set up a simple spread sheet which is linked to my data feed to calculate a similar value for NDX as well as INDU and its futures. This is a good link for more information about program trading, fair value, and meaningful program buy and sell levels. programtrading.com