Cash Futures Divergence (CFD)

Discuss Cash Futures Divergence (CFD) at the Technical Analysis within the Traderji.com - Discussion forum for Stocks Commodities & Forex; This is in response to Joy Mitali's request for an explanation of the phenomenon ...


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  #1  
Old 28th November 2005, 08:48 PM
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Default Cash Futures Divergence (CFD)



This is in response to Joy Mitali's request for an explanation of the phenomenon of "cash futures divergence" or CFD - which I had touched upon briefly in another discussion.

What is cash futures divergence: Simply described, it is when a stock/commodity/metal or currency which trades both in Cash and Futures market shows a divergence at some point in time.

What happens is that one of the market goes up and the other is either stable or falling - or the cash makes a new high and the futures either does not follow or goes in an opposite direction - this is termed as CFD

This phenomenon gives us interesting clues to the possible future direction of the market and it is worth watching for some of these important hints that the market throws at us from time to time.

I am posting two charts of platinum cash and futures to demonstrate the point

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  #2  
Old 29th November 2005, 12:43 AM
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Default Re: Cash Futures Divergence (CFD)

Hi Nautilus,
My utmost thanks,to u---for initiating this thread----found no charts---Do plz upload in traderji once more---if u have ur time---
Regards,
joy_mitali

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  #3  
Old 29th November 2005, 06:41 PM
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Default Re: Cash Futures Divergence (CFD)

Quote:
Originally Posted by joy_mitali
Hi Nautilus,
My utmost thanks,to u---for initiating this thread----found no charts---Do plz upload in traderji once more---if u have ur time---
Regards,
joy_mitali
Hi Joy:

Ran into some problems trying to load charts from metastock into traderji - the program just kept on hanging up - as soon as I have resolved the problem I will load them.

If you have any tips on loading from metastock do help. Harish Chedda did suggest some tips yesterday.

nautilus

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  #4  
Old 29th November 2005, 07:56 PM
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Default Re: Cash Futures Divergence (CFD)

Quote:
Originally Posted by nautilus
Hi Joy:

Ran into some problems trying to load charts from metastock into traderji - the program just kept on hanging up - as soon as I have resolved the problem I will load them.

If you have any tips on loading from metastock do help. Harish Chedda did suggest some tips yesterday.

nautilus
You can use Hypersnap to capture the chart images. Capture them in GIF format.

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  #5  
Old 29th November 2005, 08:00 PM
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Default Re: Cash Futures Divergence (CFD)

Hi Joy:

Here are the charts for Platinum cash and futures showing CFD - in this example the divergence is quite subtle but in some cases the divergences actually scream at you!

Regards

Nautilus

Attached Images
File Type: png plat-cash.png (15.8 KB, 25 views)
File Type: png plat-fut.png (17.0 KB, 22 views)
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  #6  
Old 29th November 2005, 08:03 PM
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Default Re: Cash Futures Divergence (CFD)

Quote:
Originally Posted by Traderji
You can use Hypersnap to capture the chart images. Capture them in GIF format.
Thanks Traderji:

Just managed to post the chart on to the forum. It is the first time I have posted charts - so I guess some teething troubles!

Thanks once again.

Nautilus

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