How accurate are stock futures in predicting what the market will do on a daily basis?

alanj answered one year ago …

I can't help you with individual stock futures. All I can do is tell you what I have observed with the S&P 500 Index ( SPX ) and it's futures contract. During the day when the US stock markets are open both SPX and the futures price are very close to one another. On a minute by minute (sometimes seconds) basis one will go up (or down) and the other will follow. But, sometimes it will move up (or down) and then reverse and go back to the general area where it came from. There just isn't any way to tell what it will do. I when I say move I'm talking about small moves. One can not get to far away without either the other following or reversing to go back to where it came. The only way, I can think of, one could take advantage of a situation where say the futures moves up and then the SPX starts to follow is to be a day trader with deep pockets standing on the floor of the exchange. And they even get it wrong.

The only way to use the futures as a predictor is by observing where the futures is minutes or sometimes seconds before the stock markets open. But, not before. Lets say the S&P closes at 1000 and over night the futures is up a hundred points just before the stock market opens. When the market opens it will open up very close to a hundred points up. But, there's no way to take advantage of this move because at the close of each trading day both the SPX and the futures are about the same price. And there's no way to know at the close where the futures price will be at the next day opening. Using the futures as a predictor and being able to take advantage of that prediction doesn't exist. So, forget it. If it where that easy, someone would have figured it out long ago and the SEC would have come up with regulations to prevent it.