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Do you guys know of a specific source of news that may help me track down a few different times when the S&P thus the ES Minis just seem to fall out of nowhere?
I've been getting better at tracking patterns with price action and volume but sometimes, for no apparent reason to me, the ES Mini contract price just tanks (or shoots up). The only thing I can think about is some news catalyst or combination of large cap stocks really moving the entire S&P which gets reflected in the ES futures.
For example, today at around 10:40EST, it tanked hard (32 points in about 20 minutes). I've been looking around for some catalyst that may have affected this but I can't find anything. I want to learn from my lack of information because I lost a lot thinking I was just going to continue to focus on price action.
My guess is that volatility is unpredictable. Two dimensional analysis which the industry likes because it is simple, cannot be taken very seriously as a tool capable of dealing with this.
The typical hedge fund guy gets an MBA in Finance from a good school and somehow convinces him or herself that dubious statistical measures (such as VIX) have some prediction value.
This Value corresponds to a Future, the future is affected by current prices, the future value. (News)
And supply and demand about the future.
In addition, the fact that a large buyer enters, affects the price, and in that case it should tend to return to the average value.
Greetings and success
This is where having a news squawk is really important. Or you can just watch twitter as there's a lot of news squawks out there. This is also where the chatrooms can be useful.
On the day you are talking about there wasn't any clear catalyst for the selloff into the end of the day. It started about the time that people get the calls from their brokers about margin calls so that is my primary theory for that move.
