Why Global Markets Matter
Markets are interconnected. Asian and European sessions often foreshadow US trading.
The 24-Hour Cycle
| Session | Time (ET) | Key Markets |
|---|---|---|
| Asia | 7pm - 4am | Nikkei, Hang Seng, ASX |
| Europe | 3am - 11:30am | DAX, FTSE, CAC |
| US | 9:30am - 4pm | S&P, Nasdaq, Dow |
Correlation Framework
High Correlation Markets
- Germany DAX → US Tech
- Japan Nikkei → S&P 500
- China A50 → Emerging markets
Divergence Signals
- US up, Asia down = Potential exhaustion
- Europe flat, US surging = Positioning risk
Practical Application
- Pre-market prep: Check how Asia/Europe traded
- Gap analysis: Global moves explain opening gaps
- Risk assessment: Global weakness warns of spillover
Key Takeaways
- No market trades in isolation
- Asian weakness often leads US weakness by 12-24 hours
- European session confirms or reverses Asian direction