VALUE of the market

Can someone please explain what undervalued or overvalued means and how we know what the current value actually is?

Regroup... I get the gist of under and over.. I guess I just don't know how to know what the actual value is. Thanks!

Look at DT value area and point of control daily posting it is in front of your eyes every day

the VA is a range .. POC is point of control does that mean point of value
.. is there a one # value

Jim Dalton calls POC the fairest price hence come the value

Thanks all for responding, but I was having trouble configuring this question when I first posted and it appears I was misunderstood.

Maybe I should of asked for "fair" value?

What I'm questioning may be unimportant in the MyPivots forum, but still a curiosity in my mind. AND, thinking about it, may not even apply to the emini s&p?

From what I understand... Futures contract are a safety to protect Sellers, Buyers and or both. I don't have any books around at the moment to quote properly word for word, but it's an agreed upon price at the end of the quarter, if you get my gist.

I understand this to be Fair Value. How do I know or find out what that value, agreement or arranged contract price is?

Reason this plagues me is I often here in the news that the market is way over priced. It cant sustain this growth any longer. Or, the economy is bounced back, and the market has not reflected that. There is plenty of room for growth.

Some powerful guy posted on some yahoo news months ago saying the market was worth 1275... and for a while, regardless of the direction the market headed... it always managed to bounce back to 1275 for quite a while. I was fascinated by that.

I'm not sure this question even makes any sense, but by chance if someone can give a general explanation... it may give a little insight as to how the market moves.

It sounds like your listening to fundamental analysis,, earnings, revenue, growth, past & present PE & PEG ratios etc. Most traders here use technical analysis. We take it day by day week by week, it is what it is, whether the news or the market makes sense or not, when conditions change so do we.

The problem with Fundamental analysis is, the market can stay over bought or oversold longer than you can stay liquid. In both types of analysis there are many different methods & opinions & just because someone is a guru or on TV doesn't make their way or opinion right.. Try to find something that works for you,, dont have a bias or try to wish the market one way or the other, get to the point where you dont care which way it goes or what the news says. Just focus on whatever system/method it is you're using to give you a winning edge....jus my 2 cents

I totally agree with this assessment of "value" and the explanation. Further expounding on this subject, look at what is being said. Underpriced. Overpriced. So how does one trade or invest in this?
Value is the illusion of fundamentals that may, or may not be based on accurate data.
The reality is current "price". The key is price. Trade results. Based on price.Action of movements,"price"{price action).
It's the same for the markets as well as individual trading instruments.
You no doubt have references for sectors or stocks that received these same confident analysis and phrases regarding "value".
The only law governing value is the price someone is willing to pay for whatever it is they are buying, at that moment(time). Markets,auctions, garage sales,etc...all operate off this law of Value. Anything that is sold is only worth what someone else is willing to pay for it. That is called price.

Originally posted by staylor455

It sounds like your listening to fundamental analysis,, earnings, revenue, growth, past & present PE & PEG ratios etc. Most traders here use technical analysis. We take it day by day week by week, it is what it is, whether the news or the market makes sense or not, when conditions change so do we.

The problem with Fundamental analysis is, the market can stay over bought or oversold longer than you can stay liquid. In both types of analysis there are many different methods & opinions & just because someone is a guru or on TV doesn't make their way or opinion right.. Try to find something that works for you,, dont have a bias or try to wish the market one way or the other, get to the point where you dont care which way it goes or what the news says. Just focus on whatever system/method it is you're using to give you a winning edge....jus my 2 cents

In the field of business, there are so many things that you should learn first. Many do want to invest their money on it but think twice before working on it. It is not just a simple decision to make.

There should be some type of standard futures barometer for rating over- and underrated markets, much like the Big Mac Index in the Economist for rating foreign currencies... something like that would be handy.

Originally posted by TradeQueen

Thanks all for responding, but I was having trouble configuring this question when I first posted and it appears I was misunderstood.

Maybe I should of asked for "fair" value?

What I'm questioning may be unimportant in the MyPivots forum, but still a curiosity in my mind. AND, thinking about it, may not even apply to the emini s&p?

From what I understand... Futures contract are a safety to protect Sellers, Buyers and or both. I don't have any books around at the moment to quote properly word for word, but it's an agreed upon price at the end of the quarter, if you get my gist.

I understand this to be Fair Value. How do I know or find out what that value, agreement or arranged contract price is?

Reason this plagues me is I often here in the news that the market is way over priced. It cant sustain this growth any longer. Or, the economy is bounced back, and the market has not reflected that. There is plenty of room for growth.

Some powerful guy posted on some yahoo news months ago saying the market was worth 1275... and for a while, regardless of the direction the market headed... it always managed to bounce back to 1275 for quite a while. I was fascinated by that.

I'm not sure this question even makes any sense, but by chance if someone can give a general explanation... it may give a little insight as to how the market moves.

I think this is right i agree with you