30 Day Federal Funds Futures - Whale Trail Indicator - Unlocked Version
One of the best features of the Whale Trail Indicator is getting early signals on economic news releases' sentiment. On August 23rd, 2022, a large Whale made an extraordinarily large buy of the 30 Day Federal Funds future contract with October expiration (ZQ 10-22) at a price of 97.030. Relative to all other Whale trades in the past and current trading day, this was definitely an abnormally massive buy, and with the PMI economic news due to release within the next hour, this Whale trade became a great early signal to other traders as to the sentiment in the upcoming news release.
Sure enough, at 9:45am ET (6:45am PT), the PMI economic news was dropped showing that activity was slowing. With activity slowing, the Fed's recent rate hikes this year appear to be working to slow demand. For ZQ, the price moves inversely to the expected Effective Fed Funds Rate (EFFR) for a contract month. In this case, the October ZQ 10-22 contract price increased to 97.065 reflecting a higher probability of a 50bp hike instead of a 75bp hike at the upcoming September FOMC meeting. Since the tick size for ZQ is 0.005 and each tick is worth $20.835, this could have been a quick trade for 4-6 ticks of profit per contract, or about $83-$125 per contract).
Even though economic news releases should be fairly distributed to all market participants at the same time, some Whales get their information early (of course), and that is what makes the Whale Trail Indicator so powerful and essential for successfully trading the markets. Test drive the 'Whale Trail Indicator - Unlocked' version with a Free Trial and see how having the right tool can analyze the order flow, simplify the market, and change your trading performance!
Happy Whale Watching!
Sure enough, at 9:45am ET (6:45am PT), the PMI economic news was dropped showing that activity was slowing. With activity slowing, the Fed's recent rate hikes this year appear to be working to slow demand. For ZQ, the price moves inversely to the expected Effective Fed Funds Rate (EFFR) for a contract month. In this case, the October ZQ 10-22 contract price increased to 97.065 reflecting a higher probability of a 50bp hike instead of a 75bp hike at the upcoming September FOMC meeting. Since the tick size for ZQ is 0.005 and each tick is worth $20.835, this could have been a quick trade for 4-6 ticks of profit per contract, or about $83-$125 per contract).
Even though economic news releases should be fairly distributed to all market participants at the same time, some Whales get their information early (of course), and that is what makes the Whale Trail Indicator so powerful and essential for successfully trading the markets. Test drive the 'Whale Trail Indicator - Unlocked' version with a Free Trial and see how having the right tool can analyze the order flow, simplify the market, and change your trading performance!
Happy Whale Watching!
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