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Strategies & Market Trends : Waiting for the big Kahuna -- Ignore unavailable to you. Want to Upgrade?

To: Follies who wrote (27433)	9/11/1998 10:39:00 AM
From: HairBall	Respond to of 94695

dale: The charts sure support that premise. Regards, LG

To: Follies who wrote (27433)	9/11/1998 12:08:00 PM
From: James F. Hopkins	Read Replies (1) \| Respond to of 94695

Dale; So much of what happens with the SPY and any such index fund, ( and we have a lot of them now days ) happens in a very complex way. They have order flow and need to spend or raise cash depending on the orders. They use a type of futures arbitrage to stay in step with the market. That's why I keep seeing such a war in the futures pits. Now I don't understand this procedure in fact I'm having a hard time even guessing at it. The CBOE does not make this public , you can however go to their school and take the courses on it. If I were younger I would sure invest in those courses, ( it means a trip to Chicago and a stay there for likely several weeks plus the cost of the courses) ------------------------- I strongly suggest that no one even think about playing futures if they don't take the CBOE courses and get to understand the mechanics of index arbitrage getting in that ring of fire is the fastest way to the poor house there is if you are not fully educated to as to how these things work. I'm sure that even if I did understand them there would be no way to explain such a complex system posting to SI, as an interactive feed back would be to get the points across, and one would get into an endless Q&A that would be far to time consuming, as well as confusing for any one who jumped in at the middle. On top of that you would wind up trying to deal with all the shoot from the hip wanta be stock gurus that think if they one up you then they are somehow smart. I would love to see the CBOE offer these courses via the internet, were you paid the fee, got the basic material and then so much time as an individual to get feed back with the instructor. I hope in time they will do something like that. As for the indexes, the way they open are often erratic depending on how many stocks have a lot of buy/sell orders to match, and open late as a result. Like this morning on the HFX index, AT&T opened late and had a lot of sell orders, it caused that index to do a fast zig zag , down then back up. On some days you can't tell what's going on till about 10am, unless your looking at the top stocks in the index. I'm reasonable sure as soon as the Specialist saw that order on AT&T , they took short positions on GE, KO, MO & XON at the open. Mind you they may not hold them very long, it will depend on the order flow, and if and when they close them, they will buy from new shorts that come in below them. Most of the early volume is thus a passing on of short positions, I suggest one don't ever short right on or after the open, the S/MMs are waiting on you, and you may get a better deal if you don't rush in. <G> Hope I'm not sounding like a smart arss, but I'm sure a CBOE course on futures and index arbitrage is what it will take to understand even half of all the early moring confusion. I feel while not educated I'm still not a dumba*ss, but my experience as a navigator let's me know that the futures pit is over my head at this time yet it's some how sending signals however only a really experienced arbitrage person can read them. Jim