Wall Street Under the Covers...

A quick, simple look at the Index futures for the SPX, NDX and Russell 2000 reveal something that would seem to be interesting, however it's often the basis of many of our trade set ups.

With SPY at a mediocre close of +0.23%, the IWM at a lagging close of -0.33% and the QQQ at a leading close of +1.36% I suspect you could imagine what the underlying action would look like in each of the averages based on their closing prices. Remembering that Wall Street's orders/positions are so large, if they were to place them at once they'd crash or drive an asset up in a way that would have regulators screaming Flash Crash or Ramp Job and likely put their position (even if highly profitable) at a loss. In other words, unlike us, they can't simply place an order for a position and be done with it, it's a process and there are specialized, predatory HFT's that look for their orders, better known as "Icebergs" so they can front run them and nail it to the large institutional traders.

Back to the point which is the point of a head fake move whether running below a very visible support level and triggering a boat load of stops to pick them up on the cheap without anyone every wondering "Who took the other side of that trade?" Or in a head fake move/false rally, causing a breakout above a very visible technical area that traders have been conditioned to react to over a century so there's demand to sell or short in to (both actions come across the tape as a sale). You just have to keep in mind, Understanding the Head-Fake Move... Motivation



Take the ES/SPX Futures...ES on an intraday chart...

 ES/SPX futures intraday. The SPY barely moved today at a +0.23% gain. The 3C chart of ES is nearly perfectly in line with price action, no significant institutional action was undertaken here.

TF/Russell 2000 Futures. The IWM closed at a loss of -0.33%, pretty hard to sell in to or short in to in any size, so what do you need to do to be able to sell or short in to demand?  While a minor divergence, interesting that it is positive given the IWM's losses today as compared to the next chart...

NQ/NASDAQ 100 futures, The QQQ close up +1.36%, note the difference between this 3C chart on the very same timeframe vs. the two above,  this was the only average that gave institutional traders demand, price strength...SOMETHING TO SELL IN TO and it appears they did just that.