In normal market environment, long term funds only act on market open and close time. When liquidation is needed, however, their presence will skew the overflows in the underlying stocks, making the usual PA, price levels, etc. much less reliable. Think about an institutional trader holding a deck of orders to sell 10 mil shares of some stock for several funds. If you were the trader, whose bonus is based on his ability to executed the orders at better prices, you would certainly try to sell on a pop. But there is no pop today. And you have to complete the order by the end of the day ...
I think all the smart money (well, we know them to be dumb money by now) would have liquidated on Monday when the Dow jumped more than 1000 points. Hence my own rationale for the lack of a panic which you would lead us to believe.
Not talking about smart money at all. Firms like SAC are confirmed seller to raise cash already and they are now on the sideline, thus even less intraday buying power so to speak. The long term funds I am talking about are the slow reacting mutual funds, pension trusts that keep buying stocks when money are poured into their funds. They are the ones in need of raising cash now.
There goes 3K But, here we go again, looking for a 20 to 30 point rally Buying ES @ 929 and lower (1929??? hmmm..) and lower