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Timezone(s) Trading Opportunity

Published on March 1, 2007

Timezone(s) Trading Opportunity

March 1, 2007

Ooopss Shanghai did it again!

As of March 1, 2007 closing, it has given back yesterdays’ gain and closed 2.9% down. Here is the intra day chart winning-trade_5.jpg

Sponsors:

Since just two days back Shanghai sell-off triggered a world-wide sell-off, I thought to dive into a brief analysis of world stock markets and see if there are any linkages (from other than obvious ones). So here is the outcome from Asian markets to ponder:

  • Japan: After falling nearly 340 points (~2%), Japan’s Nikkei recovered and closed 150 points below (0.86%) winning-trade_4.jpg
  • Singapore: Strait Times Index of Singapore also gave all of yesterday’s gains but then recovered in the afternoon. Here is the intra day chart winning-trade_3.jpg
  • Hong Kong: Hang Seng Index was down about 300 points (1.55%)–> winning-trade_7.jpg
  • India: Dipped and then defied the gravity as, Bombay Stock Exchange (BSE) which, as of writing this post, was up 200 points (1.5%). Here is the intra day chart: winning-trade_2.jpg

If you look at the charts for Nikkei, Singapore and India, the turn around happened roughly 1pm India time (i.e. 2;30 am -3:00 am US EST, 3:30 SG time). This is the time when next days US stock market futures start to pick-up pace and sets the tone for next day. At the same time, Europe also starts to open. There is something interesting here. The big picture drives the next thought, who is leading whom?

But the bigger point is—You can profit from different stock markets basing your movement due to geographical time-zone differences. If you look at chart pattern, there is more to it. Now try pasting this into US stock market and US Stock market futures, you will find some more interesting dynamics. I have not gone into regression analysis to find out the relationship, but intuitively I think there is a linkage and money can be made. Please do keep in mind though, that this is very short-term, rather, intra 24hrs, trading opportunity and requires very tight set-ups. Once I get more details into it, I shall share with OP readers.
Cheers and wish you profitable trading, OptionPundit

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