A New Breadth in Town

I have been experimenting with adding a few layers to my breadth analysis.  The beautiful trait of index futures is you have lots of visibility into the underlying elements driving direction (during regular trading hours).  There are three indispensable breadth measurements to use when trading index futures.

For the overall equity complex, you cannot beat Exodus market breadth.  It is comprehensive and indicative of overall directional conviction during the day.  It tracks over 4000 stocks, bravo.  Today we are a tad below 40% so not exactly confirming the selling.

Next I use The NASDSAQ Net Issues.  One of the things I love about trading NASDAQ futures is it tracks 100 underlying components.  That means the index’s respective TICK and NET ISSUE are easier to make sense of.  Net Issue is making a new low on the session as we head into afternoon trade–supporting the down day.

Finally, and indispensable, is the ‘free money’ trade.  This is a concept Josh Brown introduced us to during the conference.  The idea is based on the assumption that only a few of the exciting tech companies can be trusted and therefore trade with impunity.  He did not give specifics, but it doesn’t take a hound sleuth to connect the dots.  I always track the intra-day performance of Amazon, Alphabet, Facebook, and Netflix.  When they were rallying this morning, I knew better than to press shorts on the /NQ.  Priceless.  But now heading into the afternoon they are fading, interesting.

If you are getting up to speed with index trading, it behooves you to develop a feel for these breadth measurements.  They are indispensable context as your navigate the field.

Speaking of Facebook, why haven’t you liked our page yet?  iBankCoin is expanding its web dominance into this space and you should be a part of it.  Show your real life friends your financial savvy by sharing our timely and candid commentary like its your own.  Then watch the likes come pouring in, like a shower of glory and greatness.