[darthtrader]

I've pretty much added PREM to my trading at this point. I've pretty much given up on getting any other information on programs outside this.
my observations so far are:
-IndexArb's fair value levels are great, its basically the zero point where cash and the futures are in line.

-IndexArbs program probability levels are totally useless. The programs come in alot more than at the levels they say on the site. I've still never seen PREM hit the levels they give as the lowest level let alone be even close to the upper/lower end of their probability level.

-If you plot the fair value level it makes alot of sense to get in on the futures in the direction of PREM and not so much sense to be on the otherside of PREM(at least on YM). If you get in on the other side your basically overpaying for the futures vs cash.

-I have yet to see the futures be over/undervalued vs cash, then the cash market move so fast in the opposite direction that it triggers a program.

-If you do the above, your still never going to know when cash/futures get out of wack to trigger a program. If you get in on the futures when they are undervalued though, maybe you get lucky and a program goes off in your direction. Its really interesting on a breakout at a key level because you can kind of see in price action when the programs move YM for 10-15 points, then you get the chasers who then give the futures a bit of follow through. If your in the trade and get a program on your side, its a good time to take some profit and sell to the chasers if it fits your time frame.

-Its especially good to watch this for trade management once your in a trade if your time horizon is low enough. If PREM drifts to the other side of your position and then spikes down huge it might be a good time to scratch if the program hasn't gone off yet. If it has your stop will probly already get hit before you can click the mouse anyway.