Hi Folks, when I get a really good question from a member that I think may be good for other members to know the answer to, I will share it along with my response.
From our lovely member: “Hi Larry, I noticed that in the past few weeks, you mainly comment on NQ, so does that mean that you have mainly only been trading that index and not ES? Is that because there isnt as much opportunity on ES right now? Just wanting to understand if you always trade both most days, or if sometimes just the one for specific reasons. Thanks!”
My response: That's actually such a great question. So you may have noticed that I have done all the DCFs on Mag 7 and main Semi companies. For this reason, you may notice my edge is stronger in NQ compared to ES. This is because I've done the fundamental work on the companies that weigh most in this index. I will still comment on ES, it's just that because the index is more diversified in terms of sector exposure, it is slightly harder for me to know where it may land day to day. But I will comment on it when appropriate of course. I would say NQ is about 60-65% of my activity. ES is about 35-40%.
Note of caution: NQ is a faster and more aggressive market than ES. If markets are risk on, there tends to be more opportunity in NQ because it has a lot of range expansion. If markets are risk off, ES is somewhat of a safer market than NQ. Relatively speaking. ———-
If a corrective market comes back in tech later this year (and because I make most of my money from the long side. I am not expert on shorting), I want to be ready to trade bullish sequences in the Dow, which may offer sector rotation opportunity away from tech.
In 2022, when the S&P 500 and Nasdaq-100 were clobbered by the Fed’s aggressive policy stance, the Dow was down -7-8%. To me, that means it offers diversification opportunity and it is worth learning.
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Great question from a Member (I wanted to share the question and my response): NQ vs. ES
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Hi Folks, when I get a really good question from a member that I think may be good for other members to know the answer to, I will share it along with my response.
From our lovely member: “Hi Larry, I noticed that in the past few weeks, you mainly comment on NQ, so does that mean that you have mainly only been trading that index and not ES? Is that because there isnt as much opportunity on ES right now? Just wanting to understand if you always trade both most days, or if sometimes just the one for specific reasons. Thanks!”
My response: That's actually such a great question. So you may have noticed that I have done all the DCFs on Mag 7 and main Semi companies. For this reason, you may notice my edge is stronger in NQ compared to ES. This is because I've done the fundamental work on the companies that weigh most in this index. I will still comment on ES, it's just that because the index is more diversified in terms of sector exposure, it is slightly harder for me to know where it may land day to day. But I will comment on it when appropriate of course. I would say NQ is about 60-65% of my activity. ES is about 35-40%.
Note of caution: NQ is a faster and more aggressive market than ES. If markets are risk on, there tends to be more opportunity in NQ because it has a lot of range expansion. If markets are risk off, ES is somewhat of a safer market than NQ. Relatively speaking.
———-
On that note, Iike I mentioned in my 5/9 Daily Plan today, I am also actively studying the Dow Jones. Why also the Dow?
If a corrective market comes back in tech later this year (and because I make most of my money from the long side. I am not expert on shorting), I want to be ready to trade bullish sequences in the Dow, which may offer sector rotation opportunity away from tech.
In 2022, when the S&P 500 and Nasdaq-100 were clobbered by the Fed’s aggressive policy stance, the Dow was down -7-8%. To me, that means it offers diversification opportunity and it is worth learning.
Always learning,
Larry