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114 STRATEGIES TO WIN
contract for the total average daily move. The ATR constantly changes, so
it is a good idea to regularly verify the daily range. One good site for doing
so is http://www.barcharts.com.
In the early days, the only way to trade the S&P futures was by
phoning orders to the floor of the exchange for execution. Business was
conducted only when the open outcry pits were active. The Globex ter-
minal changed all of that. In 1987, the CME proposed the concept of
an after-hours trading platform, an electronic trading system for futures
contracts. However, it took another five years before the ideas were
transformed into reality. Now it is possible to trade the S&P almost
24 hours a day. The Globex session opens on Sunday afternoon at 5:00PM,
and on weekdays the action begins at 3:30PM. Trading continues until
3:15PMthe following day. That means that a regular Globex trading ses-
sion extends from Monday afternoon to Tuesday afternoon with only a
15-minute gap.
I regularly trade the after-hours markets, and the S&P 500 is one of my
venues for making money. Another one of my favorites is the Dax. Because
I discuss Dax strategies in Chapter 9, I will focus on S&P plays here. Below
are two of the S&P trades that I make on a regular basis.The Follow-Through
This trade takes advantage of the movements in the session that has just
ended. It is a trade that I execute around 7:00PM. The first trigger for this
trade is a daily Trading Index (TRIN) that closes higher than 2. You will
remember from Chapter 4 that the TRIN is a statistical indicator. It mea-
sures advances and declines and adds volume to the mix. This indicator
is a contrarian indicator that measures the strength and depth of mar-
ket momentum. To learn more about the TRIN, refer to Chapter 4. Suf-
fice it here to say that a TRIN reading of 2 or greater is very negative. I
consider a 2 at the close of the daily session to be a signal that a rever-
sal or correction to some degree may be attempted in after-hours trad-
ing. Therefore, rather than looking for a selling opportunity, I look for a
buying one.
However, I do not buy until I have some confirmation that my hunch
may be correct. There are two things that I check. First, I look for some
positive movement in night trading on the S&P, Nasdaq, and Dow futures.
Has the downward dive from the day session been halted? Obviously, if
these exchanges are continuing to move down and follow the end-of-the-
day trend, I will not be a buyer. The bears are too strong and the market is
continuing its downward slide.