Controlling market with futures?

Discussion in 'Index Futures' started by ddefina, Jun 25, 2002.

  1. ddefina


    I was watching today's S & P Cash approaching yesterday's intraday low of 987.92, and wondered if it would hold that support. Around 14:25 cash rebounded hard and went up 8-9 points while the futures tried to go down. The premium hovered at 7-8 points for 10 minutes over the near month. Was someone possibly using the leverage of futures to pull the market down below support and ruin the small bear rally we were to have? Could the leverage of futures in the right hands out muscle the cash players for a period of time and cause a change of events at a critical juncture? Sure enough cash gave in, and the markets broke support trading lower as of this moment. Not too familiar with the games in futures, but it seems something went on today.
  2. I saw that in the charts but I don't understand what happened. $PREM spiked to a -8 about 2:30 eastern, but I don't see any move in the cash $SPX or in the futures ES02U during that time.

    I though $PREM compared the $SPX to the futures?
  3. ddefina


    Look at the 14:29 bar on the INX (S&P 500 cash index) and compare to the ES02U at the same time. There's a 7-9 point difference for quite a while.
  4. Now I'm really confused. I see the spike in $INX but not in $SPX. calls both the $INX and the $SPX the S&P500 Index. I guess they are not the same thing.

    Anyways, the problem was not in the futures markets. Alan Greenspan was buying Microsoft again, but the futures markets didn't want to play like yesterday.
  5. From what I've found out INX is the S&P Cash Index from, the CME and the SPX is the same index reported by the CBOE. So, they should be the same right? Well the big spike in the cash (2:29 eastern) was seen in the INX but NOT in the SPX.

    Even worse the PREM (in livecharts) seems to be comparing futures with INX even though it is supposed to compare futures with the SPX.

    Any enlightenment on this anyone?
  6. A one minute chart of INX and SPX shows that they are identical indexes. The fifteen minute period where prices went up 8 points in the INX (but not the SPX) seems to be an error in the data feed. It amost looks like they switched over to futures of some kind judging from the range of the 1 min bars.

    A move like that in the cash would have been reflected somehow in the futures trade. The fact that the futures trade was not disturbed proves that this was regarded on the floor as erroneous data.

    Normally the bottom range in the PREM is like -1.5, not -8. Of course you get extreme ranges on the open because the cash is not updated overnight, but not in the middle of the day.

    Any other opinions on this?
  7. josbarr


    There was probably a bad tick. The futures always follows the cash and the opportunities are in the prem.
  8. Actually about 15 minutes worth of bad ticks. Also, if you look at $INX around 10:30 you'll see that PREM shot up around 4 and at that time there seems to be missing data and a weird 5 minute bar which was not present in the $SPX.
  9. ddefina


    In reality, the fact that the two indexes didn't agree for 15 minutes proves that the CBOE altered there's to cover up the scandal! Hahahaha Just wait, the INX will be adjusted by tomorrow to hide the trail. :D
  10. I didn't see the incident, but from the sound of it, unless there was a price shock, there is no way I could see this type of extreme occurring at that time of day...The programs, arbs, etc...keep that relationship pretty tight at almost all times of day...With fair value so tight to the cash now, I would agree that this is a bad tick...

    And sure futures are used to run markets around...WIth the leverage and broad market exposure, you know the big boys run these markets around, but only temporarily, until some other class of speculators get triggers to go long or short...
    #10     Jun 25, 2002