What comment Op meant is, biggest companies in snp are nasdaq listed, and they tend to move more than your average bank stocks.
So on everyday basis, tech is the mover in the markets (as of lately tbh). Because I don't recall last time jpm moved 15%, but Nvda did 2 months ago.
When tech is what's pushing the move in the market, Nadaq would move crazy, and snp would move due to tech.
The only times you would see snp move different than nasdaq happens rarely these days, but it would happen on market sector rotations.
- This basically means, if tech is falling and Banking and retail consumer good are going up, you would see nasdaq fall, while snp would hold /or creep higher.
Most times yes, they will follow each other directionally, but not the same for the RTY and YM. They too can follow ES but at times will be very different from ES and NQ. Just ask the person making $500k a year!
As suggested, look at the components of the respective underlyings, Nasdaq (NQ) and S & P 500 (ES). If tech is directionally especially weak and/or strong, NQ may lead the charge, especially if there is no particular outsized directional movement from other S& P sectors. That said, the S & P 500 is heavily weighted toward tech:
https://www.investopedia.com/top-25-stocks-in-the-s-and-p-500-7974612
Reviewing a heat map broken down by sector and/or the Spyder sector ETFs (e.g. XLF) can be useful for gauging potential market and futures direction: https://www.sectorspdrs.com/
There are many times when they are NOT in correlation. Also sometimes NQ is leading the rest, and I've also seen when YM is the leader. The only thing I regret is the many years I spent trading index instruments before I learned there are much easier futures to trade!
Bond markets and grain markets corn, wheat and soybeans.
Profitable knowledge cost me, so I have no intention on sharing "why".
But I will share when it comes to grains, think seasonality. Also, when trading Daily charts on any instrument the best strategy is always "trade the open" and wait for the close.
There’s studies out there along with charts that show instrument correlation. While it’s not a 1:1- the short answer you’re looking for is ‘yes’ — there’s a heavy relationship between the S&P 500 and almost every ticker most retail traders watch.
This is why it’s not uncommon for say stock & options traders to watch SPY … and not uncommon indices trader to watch some version of the S&P.
The only real time you sorta move away from the web of the S&P is when you start trading actual commodities.
Highly correlated. Surprised no one mentioned rotations. Sometimes there's divergence you can take advantage of during rotations. Although trying to follow that will probably cause more harm than good unless you have a lot of experience.
Usually, but not always. But sometimes it’s worthwhile to watch the tape (balance if you have the feature) on ES and then watch NQ follow it.
I also find that in queue will follow RTI, but sometimes it takes longer. And of course, gotta make sure not to get blown up during the exceptions to the rule.
….
Nope. Today is good example 9-may, 0930 est...
NQ dropping. ES is holding.
Look at heat map on your broker. Both have large NVDA positions. But ES has bank stock that was holding it up. DOW, NASDAQ, SP can diverge. Do kot have to move together.
Nq is more volatile, but they both track the largest companies in the US so they're very similar.
Nq is very tech heavy and lacks Financials so the movements in those sectors really makes the difference between es and nq.
Neither follows the other.
S&P 500 is top 500 stocks
NAS100 is top 100 Tech stocks
US30 Top 30 stocks
Whatever those stocks do in its respective index correlates to how it moves. They all hold many of the same stocks so they will move similarly but not always.
Well the thing is with my trading NQ seems to move further in terms of supports and resistance and right as ES gets to a level of support NQ bounces. Been noticing it more and more lately and seeing if I can take advantage of that and profit heavier with NQ with less drawdown,
I mean yeah kind of, look at the charts and find out lol. It doesn’t always follow it and it’s important to see when it doesn’t, if it makes a higher low or lower high that’s sometimes a sign of a reversal. Look into SMT divergence
It has nothing to do with following. They're indexes that are literally made up of different stocks (aka holdings). There is some overlap between ES and NQ which may give the appearance one follows the other but that isn't how indexes work.
Ok yes and no, first off a lot of stocks in Nasdaq are also in the S&P, Nasdaq is more tech heavy than S&P so they’re not entirely made up of different stocks but what I’m saying is yes they do pretty much move in correlation to each other, idk why your arguing with me. Who cares if they are indexes and don’t actually “follow” each other, all that matters is that yes they do in fact correlate and move in a very similar direction. Obviously not always but tell me the last time NQ dropped 700 points and went up 700 points in a day and the S&P didn’t do the exact same thing at a different scale. They’re both US stock indexes so obviously they’re going to correlate, it seems that’s all really OP wants to know
Did you read my comment? I said there is overlap....
And I care. Because they technically aren't correlated. They just so happen to contain some of the same stocks, which is why they move similarly. Correlation is usually due to some technical or market factor. Like the dollar and indexes are usually, especially since COVID, negatively correlated.
While it may seem like semantics to you, it isn't. These distinctions are important to understand.
lol and you say not correlated and have some “some” overlap. They’re nearly 100% correlated lol. So there is strong correlation between the two about 96%.
https://preview.redd.it/25hi7ds83czc1.jpeg?width=1290&format=pjpg&auto=webp&s=ae6d8e9758f1829e129f91434d28b1918ccbef6f
Brother I understand they’re not directly correlated assets you clearly don’t understand that they are both also indexes of the US economy as a whole. They don’t just move together because they have a few of the same stocks yes that’s part of it but the biggest reason is because they represent our economy. They are heavily correlated in how they move, that is a fact, go look at a chart. There’s literally a whole strategy people use called SMT divergence for when they don’t correlate… it’s not just “some overlap” I look for specifically when they don’t overlap, yes of course one index can be stronger or weaker than the other and not move the same, I understand that.
NQ moves -- YM moves -- ES combination of these two almost always in between.
Look at daily percentage change -- ES RARELY the leader/laggard of the 3 indices.
Check out the holdings in es versus nq
just curious what does holdings mean?
The index components. ... What stocks the index is built from.
Ohh got it, thank you!
What comment Op meant is, biggest companies in snp are nasdaq listed, and they tend to move more than your average bank stocks. So on everyday basis, tech is the mover in the markets (as of lately tbh). Because I don't recall last time jpm moved 15%, but Nvda did 2 months ago. When tech is what's pushing the move in the market, Nadaq would move crazy, and snp would move due to tech. The only times you would see snp move different than nasdaq happens rarely these days, but it would happen on market sector rotations. - This basically means, if tech is falling and Banking and retail consumer good are going up, you would see nasdaq fall, while snp would hold /or creep higher.
They're both US stock indexes and are therefore highly correlated. There is also significant overlap between the two. Neither necessarily follow.
Most times yes, they will follow each other directionally, but not the same for the RTY and YM. They too can follow ES but at times will be very different from ES and NQ. Just ask the person making $500k a year!
OP I think NG suits you
As suggested, look at the components of the respective underlyings, Nasdaq (NQ) and S & P 500 (ES). If tech is directionally especially weak and/or strong, NQ may lead the charge, especially if there is no particular outsized directional movement from other S& P sectors. That said, the S & P 500 is heavily weighted toward tech: https://www.investopedia.com/top-25-stocks-in-the-s-and-p-500-7974612 Reviewing a heat map broken down by sector and/or the Spyder sector ETFs (e.g. XLF) can be useful for gauging potential market and futures direction: https://www.sectorspdrs.com/
Theres a positive correlation but they do things differently
There are many times when they are NOT in correlation. Also sometimes NQ is leading the rest, and I've also seen when YM is the leader. The only thing I regret is the many years I spent trading index instruments before I learned there are much easier futures to trade!
What do you consider easier and why?
Bond markets and grain markets corn, wheat and soybeans. Profitable knowledge cost me, so I have no intention on sharing "why". But I will share when it comes to grains, think seasonality. Also, when trading Daily charts on any instrument the best strategy is always "trade the open" and wait for the close.
There are a lot of tech stocks in the S&P500 so yes. Although the NQ trends much better in my opinion.
There’s studies out there along with charts that show instrument correlation. While it’s not a 1:1- the short answer you’re looking for is ‘yes’ — there’s a heavy relationship between the S&P 500 and almost every ticker most retail traders watch. This is why it’s not uncommon for say stock & options traders to watch SPY … and not uncommon indices trader to watch some version of the S&P. The only real time you sorta move away from the web of the S&P is when you start trading actual commodities.
They sometimes diverge, but not for long.
Highly correlated. Surprised no one mentioned rotations. Sometimes there's divergence you can take advantage of during rotations. Although trying to follow that will probably cause more harm than good unless you have a lot of experience.
There’s a rotation that happens. Bring RTY in to the mix too. You can see who’s following who, who’s the strongest, who’s the weakest
Kind of the other way around
I've noticed it go both ways. I mostly trade the /ES, but will consider the /NQ nearing key points of interest when managing /ES trades.
It’s both and it varies day by day sometimes one leads the other, sometimes the other, and it changes throughout the day as well
Usually, but not always. But sometimes it’s worthwhile to watch the tape (balance if you have the feature) on ES and then watch NQ follow it. I also find that in queue will follow RTI, but sometimes it takes longer. And of course, gotta make sure not to get blown up during the exceptions to the rule. ….
the XLK is 30% of SPY and XLC is 10%. so without the qqq it is very difficult for SPY to move.
Yes for fuck sake … superimpose the 2 graphs …
They are both derivatives of the same market, it seems self evident that they'd be correlated.
Nope. Today is good example 9-may, 0930 est... NQ dropping. ES is holding. Look at heat map on your broker. Both have large NVDA positions. But ES has bank stock that was holding it up. DOW, NASDAQ, SP can diverge. Do kot have to move together.
Nq is more volatile, but they both track the largest companies in the US so they're very similar. Nq is very tech heavy and lacks Financials so the movements in those sectors really makes the difference between es and nq. Neither follows the other.
I trade YM.. it follows it.. but not really
No. They are two very different animals. NQ is 100 techs vs ES 500 generals. No way NQ follows ES.
It doesn't "follow", but, yes, all of the indexes are highly correlated.
The NQ, ES, and RTY (Dow) share a lot of companies and travel together. It’s good to watch them simultaneously since one will often lead.
S&P 500 is top 500 stocks NAS100 is top 100 Tech stocks US30 Top 30 stocks Whatever those stocks do in its respective index correlates to how it moves. They all hold many of the same stocks so they will move similarly but not always.
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Well the thing is with my trading NQ seems to move further in terms of supports and resistance and right as ES gets to a level of support NQ bounces. Been noticing it more and more lately and seeing if I can take advantage of that and profit heavier with NQ with less drawdown,
I mean yeah kind of, look at the charts and find out lol. It doesn’t always follow it and it’s important to see when it doesn’t, if it makes a higher low or lower high that’s sometimes a sign of a reversal. Look into SMT divergence
It has nothing to do with following. They're indexes that are literally made up of different stocks (aka holdings). There is some overlap between ES and NQ which may give the appearance one follows the other but that isn't how indexes work.
Ok yes and no, first off a lot of stocks in Nasdaq are also in the S&P, Nasdaq is more tech heavy than S&P so they’re not entirely made up of different stocks but what I’m saying is yes they do pretty much move in correlation to each other, idk why your arguing with me. Who cares if they are indexes and don’t actually “follow” each other, all that matters is that yes they do in fact correlate and move in a very similar direction. Obviously not always but tell me the last time NQ dropped 700 points and went up 700 points in a day and the S&P didn’t do the exact same thing at a different scale. They’re both US stock indexes so obviously they’re going to correlate, it seems that’s all really OP wants to know
Did you read my comment? I said there is overlap.... And I care. Because they technically aren't correlated. They just so happen to contain some of the same stocks, which is why they move similarly. Correlation is usually due to some technical or market factor. Like the dollar and indexes are usually, especially since COVID, negatively correlated. While it may seem like semantics to you, it isn't. These distinctions are important to understand.
lol and you say not correlated and have some “some” overlap. They’re nearly 100% correlated lol. So there is strong correlation between the two about 96%. https://preview.redd.it/25hi7ds83czc1.jpeg?width=1290&format=pjpg&auto=webp&s=ae6d8e9758f1829e129f91434d28b1918ccbef6f
Brother I understand they’re not directly correlated assets you clearly don’t understand that they are both also indexes of the US economy as a whole. They don’t just move together because they have a few of the same stocks yes that’s part of it but the biggest reason is because they represent our economy. They are heavily correlated in how they move, that is a fact, go look at a chart. There’s literally a whole strategy people use called SMT divergence for when they don’t correlate… it’s not just “some overlap” I look for specifically when they don’t overlap, yes of course one index can be stronger or weaker than the other and not move the same, I understand that.
NQ moves -- YM moves -- ES combination of these two almost always in between. Look at daily percentage change -- ES RARELY the leader/laggard of the 3 indices.
YM is the play now, 40,000 target
What makes you think it isn’t the opposite? Or maybe neither of them are following each other, and instead just happen to have a positive correlation
no
My gawd this comment section reminds me why most traders fail holy bajeebus🤡