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Sunday, October 24, 2021

Market Futures Feature for Prediction of Stock Market Trends

Most of us who are invested in the working of the share market are aware of how important stock future is to trading strategies and activities. Any changes that take place anywhere across the world have the potential to alter not only the US market futures but the financial market all over the world. Any new trend in the Asian market is bound to create a ripple that will invariably reach the US market. It is normal for us to wake up to headlines on the CNBC network broadcasting that the Asian share market is down by 3%, which in turn will affect the stock future in the home market, as the market growth is below the normal value which insinuates towards a lower open.

What we understand from this is that it is very important for the market analysis to actively update with changing market trends so that predicting market futures becomes an easier task. Every change taking place overseas affects the US market future which is why NASDAQ 100 or the S&P 500 create an up and down gapping during the opening of the US market.

What is NASDAQ?

New York Stock ExchangeThere are many stock market indexes in a country’s stock market. One of the most acclaimed stock indexes is the NASDAQ composite. These composites are indexes and they constitute all the stocks that are enlisted in the composite’s totality of stock. The Nasdaq for example constitutes information and technology-oriented stocks. They have 100 of the largest non-finance companies. T he indexes of these composites provide a live update of the stock trends of the companies that they constitute. The New York Stock Exchange has an official working hour from 9:30 ET to 16:00 ET. The indexes provided by these composites represent the current value of the market within these official working hours. 

This means the index represented by these composites accounts for the trends of the market within these 6 and half hours. This amounts to 27% of the entire day. This also means that the rest of the time, which amounts to 73% of the remaining day is not accounted for. From the figure, it becomes clear how great a segment of every day is actually not covered by these indices. Any changes taking place overseas within this unaccounted-for time period affect the stock market futures for tomorrow. This is also the reason for, as we discussed above, the high or low gap of the index that is presented when the stock market reopens the following day.

Stocks around the Globe

 NASDAQA lot can take place within this time of the day. Different time zones across the globe have different periods of activity and inactivity. They depend on the geographical location of the countries and their respective official working hours. Significant changes can take place in this time frame because any major trading decisions of the stocks that are listed in the indices may undergo a rise or fall of value depending on the trading activities in the financial market across the world. 

This creates a blind spot in the home market indices. They literally cannot see and account for any change until the stock market reopens the next day. This blind spot is responsible for drastic gaps between the stock values between two days. It is clear how important a role time plays in the financial market across the world. Hence, time unaccounted for may create a huge difference in trading activities. It is for this reason that a market futures feature is required that can keep a tab on the changing market trends throughout the day.

The Necessity of Market Futures Representational Index

The future market trends are the actual market trends that we derive from actual indices. The aim of market futures is to take into account stock and analyze all the parameters to lock an estimated future price. There are indexes like Nasdaq or S&P 500 that have trading activities active throughout the day, it is possible to study the trends in trading for these indexes to almost accurately calculate future trends and the possible market trends that may arise within the time the home stock market is not active. 

stock futureFuture trends are always affected by the markets that are open in a given period. The future index thus works by classifying the global financial market following time zones. These time zones can be analyzed individually. Thus concerning the impact, each market in other time zones may have on the global market. Additionally, to what extent are the changes in other markets influential to the stock exchange market in the US.

The Global Financial Market

The markets that open first are the Asian markets and the markets in Australia and New Zealand. The trading time of these markets is from 18:00 ET to 3:00 ET. For the European market, the official hours of trading activity are between 3:00 ET and 9:30 ET. Whereas the market in the US has an official working hour which starts from 9:30 ET to 16:00 ET. It is within this window the indices of NASDAQ or the S&P 500 remain active. They represent the market trends only within this period of the day. The official hours of the US market are between the official market activity hours of Europe and Asia.

In the first few hours of the morning session of the US market the European market remains active. Hence, there is a live relation in trading activities between Europe and the US market. It is within that particular common point of activity. The activities in the Asian market commences with the closing of the US market. This is the cycle of the global financial market.

US market futuresThe market futures feature like the S&P 500 Futures, calculates market trends throughout the day, unlike the S&P Index which only calculates the trends of the working hours. So when we look at the data representation of the index and the future, we usually see gaps in the index, whereas the Future has a gradual graph that records every instance of market trends. For example, the European market has lowered the market values in the period of USA market inactivity. The index on the following day will present a gap down on the graph for the period in which it was not active.

Conclusion

The global financial market remains active throughout the day. However, you don’t need to stay awake and update yourself to changing market trends throughout the day. You may have at your disposal news networks to provide you information on market trends. but to get accurate data and statistics on market futures, you can rely on the Futures provided by Nasdaq or S&P 500, to understand and estimate where the market trends are headed to so you can predict the condition that the market will be when it commences at 9:30 ET the following day. If you are looking for the best stocks, visit this website.



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Daniyel Carlson
Daniyel Carlson is a Young Researcher in the field of Data Science & Analytics having research experience of more than 8 years. He has a Masters in Computer Engineering and currently serves as an Editorial Assistant in IGI Global, United States of America. Daniyel also holds honorary positions in the Associate Member of Institute of Research Engineers and Doctors, International Association of Computer Science and Information Technology, International Association of Engineers, Society of Digital Information and Wireless Communications.

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