Tradeflight · Reference
Tradeflight: read the market, plan the trade. Every term in plain language, with an example.
Short explainers that tie the terms together. Start here if bonds or indices are new.
A bond is a loan. You lend 1,000 to the US government for 10 years. It pays you a fixed amount each year (the coupon), say 50, and gives the 1,000 back at the end.
That 50 never changes. But the rate the government pays on new bonds does. If new 10-year bonds start paying 60 a year, nobody will pay full price for yours. Its price drops until a buyer would earn about the same as a new one.
The 2-year yield mostly tracks what the Fed is expected to do. The 10-year reflects growth and inflation over a longer stretch, and it is the one stock valuations are measured against.
These are tendencies. On some days yields and NQ rise together, for example when strong growth data lifts both.
The Nasdaq-100 is cap-weighted: each company counts in proportion to its market value. The largest few are worth trillions each, so they carry far more weight than the smallest names.
| Company (hypothetical) | Weight in index | Stock move | Adds to index |
|---|---|---|---|
| Giant A | 9% | +5% | about +0.45% |
| Giant B | 8% | −3% | about −0.24% |
| Mid-size C | 1% | +10% | about +0.10% |
| Small D | 0.2% | +20% | about +0.04% |
A small company doubling barely registers. One giant moving a few percent can decide the day. That is why megacap earnings after the close can gap NQ overnight while the stock market is shut.
The weights above are illustrative, not current figures. Real weights change daily with prices.
Money has choices. When safe bonds pay more, stocks and gold have to work harder to attract it. When fear rises, money leaves stocks for bonds and gold.
| What happens | Usually for NQ | Usually for gold |
|---|---|---|
| 10yr yield rises fast | Pressure | Pressure |
| Dollar (DXY) rises | Mild pressure | Pressure |
| VIX spikes, credit (HYG) falls | Pressure | Support |
| Hot inflation print | Pressure | Mixed: yields up hurts, inflation fear helps |
| Dovish Fed surprise | Support | Support |
Tendencies, not rules. Pre-Flight Read's cross-asset tiles show what these are doing today.
How to read what price is doing.
One bar of price for a set time: where it opened, the highest and lowest it went, and where it closed.
Tap for example →Example
On a 15-minute chart, the 9:30 candle covers 9:30 to 9:44:59. Until 9:45 it is still forming.
Why it matters
A candle is not final until its time is up. A strong-looking candle can finish looking weak.
Related
Open, high, low, close. The four prices every candle records.
Tap for example →The price at the exact moment a candle's time runs out. The only price in the candle that is locked in.
Tap for example →Example
A 1-hour candle opening at 10:00 closes at 10:59:59. A break above resistance at 10:40 means little until the close holds above it.
Why it matters
Most rules in a plan (EMA crosses, breaks, reclaims) should be judged on closes, not on a candle mid-way through.
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The thick part of a candle, between the open and the close. Green (or hollow) if it closed higher, red if lower.
Tap for example →The thin line above or below a candle body. Price that was reached and then rejected.
Tap for example →Example
A candle with a long upper wick went up, met selling, and gave most of it back before closing.
Why it matters
Long wicks at a level tell you someone defended it.
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A candle whose body fully covers the previous candle's body.
Tap for example →Example
After a run of red candles, a green candle opens below the last close and closes above the last open.
Why it matters
Sometimes marks a turn. Where it happens matters far more than the shape itself.
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A candle that opens and closes at almost the same price. Looks like a cross.
Tap for example →Small body near the top, a long lower wick at least twice the body, little or no wick above.
Tap for example →Example
NQ dips under the overnight low, stops fire, and the 5m candle closes back near its high, leaving a long tail underneath.
Why it matters
Sellers pushed price down and buyers pushed it all the way back. At support, a rising EMA or right after a sweep, it leans long. In the middle of a range it means little. It only counts once the candle has closed.
Related
Small body near the bottom, a long upper wick at least twice the body, little or no wick below.
Tap for example →Example
Price spikes into the prior day high, gets sold, and the 15m candle closes back near its low.
Why it matters
Buyers tried higher and were rejected. At resistance, a falling EMA or into an untaken high, it leans short. The colour of the body matters less than where the wick is.
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A big body with tiny or no wicks. It opened at one end and closed at the other.
Tap for example →Example
The 9:30 5m candle opens at the low and closes at the high, 60 points up, with no wick either side.
Why it matters
One side was in control the whole time. It often continues, but buying or selling right after one is chasing. Wait for the first pullback to a line.
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A small body in the middle with wicks of similar length above and below.
Tap for example →Example
After a run up, a 5m candle opens and closes near the same area with wicks both ways.
Why it matters
Neither side won that candle. Like a doji, it is a pause, not a signal. It matters at a level, and the next candle usually decides which way.
Related
A candle with a big range but a small body: price travelled far up and far down, then closed near the middle.
Tap for example →Example
Around a news release, a 1m candle spikes 40 points up, 40 points down, and closes where it opened.
Why it matters
Volatile and undecided. Both sides got stopped out. Stops placed near the edges are likely to be hit. Usually a time to wait for calmer candles.
Related
Comparing the wick to the body tells you who won the candle.
Tap for example →Example
Body over two thirds of the range: strong, one side in control. Body tiny with wicks both ways: undecided. One wick two or more times the body: that side was rejected.
Why it matters
A quick read of any single candle before you act. Always read it at a level and after the close, never in the middle of a forming candle.
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How much time each candle covers: 1 minute, 5 minutes, 15 minutes, 1 hour, 4 hours, daily and so on.
Tap for example →Example
The same hour of trading is 60 candles on the 1m chart and 1 candle on the 1h chart.
Why it matters
Higher timeframes set the direction; lower timeframes are for timing. They can disagree.
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A peak or a trough with lower (or higher) candles on either side. A place where price turned.
Tap for example →Example
Price rises to 30,600, drops, and never gets back: 30,600 is a swing high.
Why it matters
Swings are where stops and orders collect.
Related
The pattern of highs and lows. Higher highs and higher lows is an uptrend; lower highs and lower lows is a downtrend.
Tap for example →Example
Highs at 100, 104, 108 with lows at 97, 101, 105: uptrend.
Why it matters
Tells you which side has control before you look at any indicator.
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Price closing past the last swing in the direction of the trend, confirming it continues.
Tap for example →Example
In an uptrend, a close above the most recent swing high.
Why it matters
Confirms the trend is intact. A failure to break is an early warning.
Related
The first time price breaks structure against the trend.
Tap for example →Example
In an uptrend, price closes below the most recent higher low.
Why it matters
Often the first sign a trend is tiring. Not a reversal on its own.
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A price area where buying (support) or selling (resistance) has shown up before.
Tap for example →Example
Gold bounced three times near the same level last week: that level is support.
Why it matters
Levels are zones, not exact lines.
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Price not only trading past a level but closing a candle beyond it.
Tap for example →Example
A 15m candle pokes above resistance but closes below it: that is not a break and close.
Why it matters
Filters out many false breakouts.
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Price reaching a level and being pushed back hard, leaving a wick.
Tap for example →Example
NQ spikes into a prior high and the candle closes near its low.
Why it matters
Shows a level is being defended.
Related
Price moving sideways between a clear high and low.
Tap for example →Example
Gold trading between 4,090 and 4,130 all session.
Why it matters
Breakout trades fail more often inside ranges. Edges of the range matter most.
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Higher high, higher low, lower high, lower low. The four labels for every swing.
Tap for example →Example
Highs at 30,500 then 30,560 (HH), lows at 30,420 then 30,470 (HL): uptrend.
Why it matters
An uptrend only prints HH and HL; a downtrend only LH and LL. Both mixed together means no trend.
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A broken level changing jobs: old resistance becomes support, or old support becomes resistance.
Tap for example →Example
NQ closes above a ceiling it failed at twice, pulls back to it, and buyers defend it.
Why it matters
Retests of flipped levels are some of the cleanest places to plan an entry.
Related
The base of candles where a sharp move started. Demand before a rally, supply before a drop.
Tap for example →Example
Gold sits in a tight cluster, then rips 25 dollars. That cluster is a demand zone.
Why it matters
Fresh zones tend to react on the first return; each visit after uses up more of the orders there.
Related
Reading the higher timeframes first, then zooming in.
Tap for example →Example
Daily says uptrend, 1h shows a pullback, 5m shows where the pullback might end.
Why it matters
Stops you taking a 1-minute signal straight into a daily wall.
Related
Exponential moving average. An average of recent closes that weights newer candles more heavily.
Tap for example →Example
The 14 EMA on the 15m chart averages the last 14 fifteen-minute closes, favouring the newest.
Why it matters
Always name the length and timeframe: "the 50 EMA on the 1h" is a different line from the 50 on the 15m.
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A faster EMA crossing a slower one. Up through it is bullish; down through it is bearish.
Tap for example →Example
The 9 EMA on the 15m crosses above the 21 EMA on the 15m.
Why it matters
Judge it on a closed candle. A cross mid-candle can undo itself before the close.
Related
How far price has moved away from a moving average.
Tap for example →Example
NQ trading 200 points above its 14 EMA on the 1h.
Why it matters
Very stretched price tends to snap back toward the average or pause.
Related
Moving averages drawing close together, squeezing price between them.
Tap for example →Example
The 20, 50 and 200 EMAs on the 1h all within a few points of each other.
Why it matters
Squeezes often come before a larger move. Direction is not given.
Related
Volume-weighted average price for the session. The average price everyone paid today, weighted by size.
Tap for example →How much traded in a candle. On CFD platforms this is usually tick volume (number of price changes), not real contracts.
Tap for example →Example
A breakout on double the average volume is more believable than one on thin volume.
Why it matters
Confirms whether a move has participation.
Related
What kind of day it is, and structure in three steps.
The kind of market you are in right now: trending or ranging, quiet or volatile.
Tap for example →Example
A quiet range day after a big trend week.
Why it matters
The same setup works in one regime and fails in another. Name the day before picking setups.
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A session that moves one way from early on, with shallow pullbacks.
Tap for example →A session that swings between a clear high and low and keeps returning to the middle.
Tap for example →Example
Gold sweeps the morning high, then the morning low, and closes in the middle.
Why it matters
Fading the edges after a sweep works; breakout entries mostly fail.
Related
Higher highs and lower lows in the same stretch. Nothing follows through.
Tap for example →Example
Three failed breakouts in both directions before 11:00.
Why it matters
The best trade is often none, or much smaller size.
Related
The high and low of the first 30 to 60 minutes of the main session.
Tap for example →Example
NQ between 30,480 and 30,560 from 9:30 to 10:00.
Why it matters
Whether price leaves it and holds outside on closes is an early clue to the day type.
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Indication, correction, continuation. Market structure described as three steps, popularised by Trades By Sci.
Tap for example →Example
Break a high, pull back to a higher low, break the high again.
Why it matters
A second lens for confirming a read, not a system on its own.
Related
Price closing beyond the last swing high or low for the first time.
Tap for example →Example
NQ closes above the prior high on the 5m.
Why it matters
Shows direction and the next zone price is likely heading to. It is not the entry yet.
Related
The pullback after an indication, forming a higher low (or a lower high).
Tap for example →Example
After breaking the high, NQ dips back into the 14 EMA on the 5m and holds.
Why it matters
Where impatient traders get shaken out. Its extreme becomes the protection level.
Related
Price breaking beyond the indication high (or low) again after the correction.
Tap for example →Example
NQ takes out the new high it made during the indication.
Why it matters
Confirms the trend is continuing. Where the trigger sits.
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The correction's extreme: the line price should not close back through if the trend is intact.
Tap for example →Example
The higher low at 30,470 in an NQ uptrend.
Why it matters
Same job as the "wrong if" line in a Tradeflight read.
Related
The idea that price travels from one key level to the next.
Tap for example →Example
Break above 30,560 and the next zone is yesterday's high.
Why it matters
Gives targets straight from the chart.
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Marking levels at candle bodies (accepted prices) rather than wick tips (prices tried and refused).
Tap for example →Example
A wick to 30,600 but a close at 30,580: the level that counts is 30,580.
Why it matters
Filters out sweeps that look like breaks.
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Where the orders sit, and why price goes looking for them.
Resting orders waiting to be filled, clustered where people predictably place them.
Tap for example →Example
Stop losses stacked just below yesterday's low.
Why it matters
Big players need lots of orders to fill size. Price is drawn toward those clusters.
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Orders sitting above a level (buy side) or below it (sell side).
Tap for example →Example
Above a double top: short sellers' stops (which are buy orders). Below a double bottom: long buyers' stops.
Why it matters
Tells you which way a sweep would likely go.
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Price pushes just past a level, triggers the orders there, then turns back. The candle closes back inside.
Tap for example →Example
NQ dips 10 points under the overnight low, stops fire, and the 5m candle closes back above the low.
Why it matters
A sweep that closes back inside is often a better entry than the break itself.
Related
A sweep described from the side that got stopped out.
Tap for example →Example
Your stop at the obvious low gets taken, then price rallies without you.
Why it matters
Not personal: size seeking the cheapest fill. Place stops past the obvious spot.
Related
Two or more highs (or lows) at nearly the same price.
Tap for example →Example
Two tops at 30,616 and 30,618.
Why it matters
A visible magnet: stops pile up just beyond them.
Related
A gap left by a fast candle, where the wicks of the candles either side do not overlap.
Tap for example →Example
A big green 5m candle leaves space between the high of the candle before it and the low of the candle after it.
Why it matters
Price often comes back to fill part of it before continuing.
Related
The high and low of Asia, London and New York sessions, and of the prior day.
Tap for example →Example
The Asia low at 30,404 becomes a target in London.
Why it matters
These are the most watched levels, so liquidity collects there.
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How trades are placed and how losses are kept small.
Long means you bought and want price up. Short means you sold first and want price down.
Tap for example →Example
Short gold at 4,115, buy back at 4,100: profit.
Why it matters
You can profit in either direction, and lose in either.
Related
A market order fills now at the current price. A pending order waits for price to reach your level.
Tap for example →Example
Buy limit below price (buy the dip). Buy stop above price (buy the breakout). Sell versions are the mirror.
Why it matters
Pending orders let you plan instead of chase.
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An order to buy at or below a price, or sell at or above it.
Tap for example →Example
Buy limit at 30,450 while NQ trades 30,500.
Why it matters
You get your price or better, but might not get filled.
Related
An order that becomes a market order once price reaches a level.
Tap for example →Example
Sell stop at 30,513: if price trades there, you are sold at market.
Why it matters
Used for breakouts and for stop losses. Can slip in fast markets.
Related
Prices set in advance where the trade closes at a loss or a profit automatically.
Tap for example →Example
Long gold at 4,110, stop 4,098, take profit 4,135.
Why it matters
Decide both before you enter, while you are calm.
Related
Moving the stop to your entry so the trade can no longer lose (apart from costs).
Tap for example →Example
Trade is well in profit, stop moved to entry.
Why it matters
Protects capital, but too early and normal wiggles stop you out.
Related
Getting filled at a worse price than the level you set.
Tap for example →Example
Stop at 4,098 fills at 4,096.50 during a data release.
Why it matters
Expect it around news. Size for it.
Related
What you lose if the stop loss is hit. Decided first; trade size is worked out from it.
Tap for example →Example
Pick a small fixed share of the account, then size the position so the stop costs that and no more.
Why it matters
Survival comes from keeping every loss small and similar.
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What you stand to make compared with what you risk.
Tap for example →Example
Risking 10 to make 25 is 1 to 2.5.
Why it matters
Lets you be wrong more often than right and still stay level or ahead.
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Choosing how big the trade is so the stop equals your planned risk.
Tap for example →Example
Wider stop means smaller size; tighter stop allows bigger size.
Why it matters
Size follows the stop, never the other way round.
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How far the account has fallen from its highest point.
Tap for example →Example
Account peaked, then gave some back: the gap is the drawdown.
Why it matters
The number that ends accounts, both prop and personal.
Related
Gold and currencies on a broker account.
Contract for difference. You and the broker settle the price change between open and close; nothing is delivered.
Tap for example →Account money counting closed trades only.
Tap for example →Example
Deposit plus closed profits minus closed losses.
Why it matters
Does not move while trades are open.
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Balance plus or minus the open trades, right now.
Tap for example →Example
Balance 1,000 with an open trade down 50: equity 950.
Why it matters
The number the broker watches for margin calls.
Related
The deposit the broker locks while a trade is open. Not a fee; it comes back when you close.
Tap for example →Example
Opening a gold trade might lock a few hundred dollars of your balance as margin.
Why it matters
Too many trades lock too much, leaving nothing to absorb losses.
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How much bigger a position is than the margin behind it.
Tap for example →Example
At 1:100, controlling 10,000 needs 100 of margin.
Why it matters
Changes the margin needed, not the profit or loss per move.
Related
Free margin is what is left to absorb losses. Margin level is equity divided by margin, as a percentage.
Tap for example →Example
Equity 900, margin used 300: margin level 300%.
Why it matters
Too low and the broker warns you, then closes trades.
Related
The broker's warning that equity is getting too low for the trades open.
Tap for example →Example
The platform turns the account line red at the broker's margin call level.
Why it matters
The last chance to cut size or add funds.
Related
The broker closing your trades for you because equity fell to its stop out level. What people mean by getting liquidated.
Tap for example →Example
Margin level falls to the broker's threshold; the biggest losing trade is closed automatically.
Why it matters
A stop loss you choose is always better than a stop out the broker chooses.
Related
The overnight fee (or credit) for holding a trade past the daily rollover.
Tap for example →Example
Holding gold longs over several nights costs a small amount each night.
Why it matters
Adds up on trades held for weeks.
Related
The unit of trade size on CFD platforms. For gold, usually 1.00 lot = 100 oz, 0.10 = 10 oz, 0.01 = 1 oz.
Tap for example →Example
0.01 lots of gold moves about 1 dollar for each 1-dollar move in gold.
Why it matters
Check the contract size in Specification; brokers differ.
Related
What 1.00 lot is made of: 100 oz for gold, 100,000 units of the first currency for FX.
Tap for example →Example
On MT5: Market Watch, right-click the symbol, Specification.
Why it matters
Everything about pay per move and margin starts here.
Related
The CFD platform name for your trade size, in lots (MT5 calls it Volume).
Tap for example →Example
Typing 0.05 in Volume means 0.05 lots.
Why it matters
Not the same as chart volume.
Related
The sell price and the buy price. The chart normally shows the bid.
Tap for example →Example
Bid 4,114.80, ask 4,115.10.
Why it matters
You buy at the ask and sell at the bid.
Related
The gap between bid and ask. A cost paid the moment the trade opens.
Tap for example →The smallest price step on a CFD platform. $0.01 on gold.
Tap for example →Example
Gold from 4,115.00 to 4,115.50 is 50 points on most CFD platforms.
Why it matters
Count in dollars on gold; "points" and "pips" mean different things to different people.
Related
The step people count on currency pairs: 0.0001 on EURUSD, 0.01 on USDJPY.
Tap for example →Example
EURUSD from 1.1366 to 1.1376 is 10 pips.
Why it matters
On pairs quoted in USD, one pip on 1.00 lot is about $10.
Related
The price of one ounce of gold in US dollars.
Tap for example →Example
XAUUSD 4,115 means one ounce costs 4,115 dollars.
Why it matters
Moves with real yields, the dollar and fear.
Related
One currency priced in another. The first is bought or sold; the second is what it is priced in.
Tap for example →The most traded pairs, all involving the US dollar: EURUSD, GBPUSD, USDJPY, AUDUSD, USDCAD, USDCHF, NZDUSD.
Tap for example →NQ, ES, MGC, and the rules funded accounts add.
An exchange-traded agreement to buy or sell an asset at a set price on a future date. Traders close before expiry.
Tap for example →Example
NQ is a futures contract on the Nasdaq-100 index.
Why it matters
Central exchange, one price for everyone, fixed contract sizes.
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Nasdaq-100 futures. MNQ is the micro, one tenth the size.
Tap for example →Example
One NQ point is $20; one MNQ point is $2.
Why it matters
Tech-heavy, so it follows the largest tech stocks closely.
Related
S&P 500 futures. MES is the micro, one tenth the size.
Tap for example →Example
One ES point is $50; one MES point is $5.
Why it matters
Broader than NQ; the benchmark most funds watch.
Related
Gold futures. MGC is the micro (10 oz) contract; GC is 100 oz.
Tap for example →Example
A 1-dollar move in gold is $10 on one MGC.
Why it matters
Same gold, exchange-traded, with futures hours and rules.
Related
One whole unit of price movement. Its cash value depends on the contract.
Tap for example →Example
NQ 30,500 to 30,501 is one point.
Why it matters
Tick size is smaller: NQ moves in quarter points.
Related
The smallest price step a futures contract can move.
Tap for example →Example
NQ ticks are 0.25 points.
Why it matters
Every fill happens on a tick.
Related
Futures expire on set dates (NQ and ES quarterly). Traders move to the next contract before that.
Tap for example →Example
The December contract takes over from September in the rollover week.
Why it matters
Charts on continuous symbols can jump at rollover.
Related
The near-24-hour electronic session for CME futures, outside the regular stock market hours.
Tap for example →Example
NQ trades through Asia and London while US stocks are closed.
Why it matters
Overnight highs and lows become key levels at the 9:30 open.
Related
A company that lets you trade its account under rules, and shares the profit.
Tap for example →Example
Pass an evaluation, get a funded account, request payouts.
Why it matters
The rules matter as much as the trading.
Related
The test phase: reach a profit target without breaking any rule.
Tap for example →Why it matters
Most attempts fail. Plan for survival first.
Related
The profit needed to pass, or before a payout can be requested.
Tap for example →Why it matters
Reaching it slowly is fine; breaking a rule is not.
Related
The loss threshold a funded account cannot cross. Hit it and the account closes permanently.
Tap for example →Why it matters
Your real risk budget. Size trades as a small slice of it.
Related
A loss limit that moves up as the account makes new highs.
Tap for example →Example
Account grows, and the floor beneath it rises too.
Why it matters
Profits are not fully yours until the floor stops trailing.
Related
The most the account may lose in one day.
Tap for example →Why it matters
Hitting it ends the day, and at some firms the account.
Related
A cap on how much of total profit may come from a single day.
Tap for example →Example
One huge day may need to be balanced by several smaller ones before payout.
Why it matters
Rewards steady days over one big win.
Related
The maximum that can be withdrawn in one request.
Tap for example →Why it matters
Plan payouts around it rather than around total profit.
Related
Why interest rates move everything else.
A loan you make to a government or company. They pay interest (the coupon) and return the money at maturity.
Tap for example →The fixed interest a bond pays each year, set when it is issued.
Tap for example →The return you actually earn if you buy the bond at today's price.
Tap for example →Example
That 5% bond bought at a discount earns more than 5%; bought at a premium, less.
Why it matters
When people say "rates are up", they usually mean yields.
Related
Bond prices and yields move in opposite directions.
Tap for example →When a bond pays back its money. Short end = up to about 2 years; long end = 10 to 30 years.
Tap for example →Why it matters
Short yields follow the Fed; long yields follow growth and inflation expectations.
Related
How sensitive a bond's price is to a change in yields. Longer bonds are more sensitive.
Tap for example →Example
A 1% jump in yields hits a 30-year bond far harder than a 2-year.
Why it matters
Explains why long-bond selloffs shake markets.
Related
A bond issued by the US government. Considered the safest bond in dollars.
Tap for example →The interest rate the US government pays to borrow. The 2yr and 10yr are the most watched.
Tap for example →Example
10yr at 5.23% means lending to the US for 10 years earns about 5.23% a year.
Why it matters
Rising 10yr yields tend to weigh on tech (NQ) and on gold.
Related
Tracks where the market thinks the Fed's rate is heading over the next two years.
Tap for example →Why it matters
Jumps on hot inflation or hawkish Fed talk.
Related
The anchor for mortgages, company borrowing and stock valuations.
Tap for example →The 10yr yield minus the 2yr yield. Positive is normal; negative (inverted) has warned of slowdowns.
Tap for example →Example
10yr 5.23% minus 2yr 4.93% = +0.30.
Why it matters
How the curve changes shape says more than its level.
Related
The curve steepening because short rates fall (bull) or because long rates rise (bear).
Tap for example →Why it matters
Bull steepeners are usually fine for stocks; bear steepeners usually pressure them.
Related
Interest rate minus expected inflation.
Tap for example →Example
10yr at 5.2% with inflation expected at 2.5%: real yield about 2.7%.
Why it matters
The main mechanical driver of gold, which pays no interest.
Related
The US Federal Reserve committee that sets the policy interest rate.
Tap for example →Example
Eight scheduled meetings a year, with a press conference.
Why it matters
Decision days move every asset. Avoid holding new size into them unplanned.
Related
The Fed's policy rate: what banks charge each other overnight.
Tap for example →Why it matters
Everything from savings rates to the 2yr yield keys off it.
Related
Leaning toward higher rates (hawkish) or lower rates (dovish).
Tap for example →Why it matters
Hawkish surprises usually hit NQ and gold; dovish ones help them.
Related
How single companies add up to NQ and ES.
A slice of ownership in a company.
Tap for example →Example
Own one share of a company with a billion shares: you own one billionth of it.
Why it matters
The price moves with what investors expect the company to earn.
Related
Share price times number of shares. The market's total price tag for the company.
Tap for example →Example
1 billion shares at 200 each = 200 billion market cap.
Why it matters
Most indices weight companies by it.
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A company's profit, reported every quarter.
Tap for example →Example
Company reports after the close; the stock gaps in after-hours trading.
Why it matters
Big tech earnings move NQ overnight, before the stock market even opens.
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Earnings per share: profit divided by the number of shares.
Tap for example →Why it matters
Results are judged against the forecast, not in isolation.
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What a company says it expects to earn next.
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Beats this quarter but lowers guidance: the stock can still fall.
Why it matters
Markets trade the future, so guidance often matters more than the result.
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How expensive a stock is relative to its earnings, often shown as the P/E ratio (price divided by EPS).
Tap for example →Why it matters
Higher yields make future earnings worth less today, which squeezes high-valuation tech hardest.
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Price divided by earnings per share. How many years of current profit the price represents.
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Stock at 100 earning 5 per share: P/E of 20.
Why it matters
Growth stocks carry high P/Es, so they are most sensitive to rates.
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A group of companies in the same kind of business: tech, energy, banks, health care and so on.
Tap for example →A basket of stocks tracked as one number.
Tap for example →Example
The S&P 500 tracks 500 large US companies.
Why it matters
NQ and ES are futures on indices, so the stocks inside move them.
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The 100 largest non-financial companies on the Nasdaq exchange. Heavy in tech.
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What NQ tracks. A handful of giants make up a large share of it.
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About 500 large US companies across all sectors, weighted by market cap.
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What ES tracks. Broader, so single names move it a little less than NQ.
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How much each company counts in the index. In cap-weighted indices, bigger companies count more.
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A company that is 9% of the index rising 5% adds about 0.45% to the index by itself.
Why it matters
Watch the biggest names: they can carry or sink NQ on their own.
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The very largest companies, each worth well over a trillion dollars.
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The top ten names make up roughly half of the Nasdaq-100.
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How many stocks are rising versus falling.
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Index up, but most stocks down: a few giants are doing all the lifting.
Why it matters
Narrow rallies are more fragile.
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When an index adjusts weights or members on a schedule.
Tap for example →Why it matters
Can cause unusual volume near the close on rebalance days.
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The few weeks each quarter when most companies report.
Tap for example →Why it matters
Megacap reports after the close can gap NQ in the overnight session.
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The other screens that move NQ and gold.
The US dollar index: the dollar against six major currencies, mostly the euro. Up means a stronger dollar.
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DXY at 101.23 rising while EURUSD falls.
Why it matters
A strong dollar usually weighs on gold and can pressure NQ.
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The fear gauge: expected S&P 500 swings over the next 30 days.
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About 12 to 15 is calm; 20 and up is stressed.
Why it matters
Rising VIX means wider ranges. Consider smaller size.
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The extra interest riskier companies pay over the government.
Tap for example →An ETF of high-yield (junk) company bonds.
Tap for example →West Texas Intermediate, the main US crude oil price.
Tap for example →Why it matters
Moves inflation expectations and, through them, yields.
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Risk-on: money flowing into stocks and higher-risk assets. Risk-off: flowing out to havens like bonds and gold.
Tap for example →Consumer and producer inflation readings.
Tap for example →Why it matters
Hot inflation lifts yields and usually pressures NQ and gold.
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The monthly US jobs report, usually the first Friday.
Tap for example →Why it matters
One of the largest scheduled movers of the month.
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What analysts expect a release to show.
Tap for example →Example
Forecast 0.3%, actual 0.5%: a hot surprise.
Why it matters
Price reacts to the gap between forecast and actual, not the number itself.
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Asia, London and New York. Each has its own character and volume.
Tap for example →Example
London often sets the first real move; New York opens at 9:30 ET for stocks.
Why it matters
Session highs and lows become the next session's targets.
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