Gnome you're asking me to make the leftest argument not a logical argument. When T-Bonds implode Congress and some academic fuckhead like Larry Summers will rant about highly leveraged short selling speculators employing low margins to "raid" the Treasury market and send yields skyrocketing higher, causing massive borrowing costs that inhibit the ability of the Federal government to raise money blah, blah, blah. Get ready for it. That's ALL I'm trying to say....
Again, I want to reiterate my earlier views that (1) traders all over the world (speculators and hedgers alike) can now actively trade Globex in the afterhours in a "concerted action". (2) Unlike RTH, no significant volume is required in the AH session to move the market. (3) There has never been in the history of Globex (as far as I know) a greater flux of volatility in the afterhours as we're currently experiencing. When the hell did we ever see 80-point gyration in the afterhours? (4) Ya think Uncle Sam and his P.P.T. wouldn't know about all this? More importantly, would they simply stay on the sideline and just watch until it implodes? Give or take a few more nights of these violent swings that would cause the RTH to open down more than 500 points. You can bet your ass that Uncle Sam will shut down the Globex altogether. Personally, I'm against government intervention in the market. I think it's ludicrous to see them making up new rules as they see fit. But that sems to be the norm going forward.
On the subject of the tail wagging the dog. You may reme,ber lsat year there was a day where the DOW index computer jammed [or broke down or something] for a short period, whne it was fixed it showed a jump down of 200pts in a couple of ticks or something similar. Once this was seen there was some real panic selling and the DOW plunged another 3-400 pts [from memory] even though the only thing that had changed was the DOW number. My take is that traders watch the indicies to see if anything is happening, there is so much going on that the indicies are a quick way of gauging market sentiment. So you do see the tail wagging the dog quite regularly. The indicies/futures drop and stocks get sold off. Especially in times of high uncertainty. This dual feedback loop makes trading harder IMO, ie people sell stocks, see the indicies moving lower encouraging more selling et al.....
Dude! Revert it to the mean. If you think an 80 point move is wrong , fade it. Futures are not self-floating islands of assets. They are all tied into a cash market. I have listed enough information that if your theory of irrational moves is correct you should be cleaning up.
If the ES is the leading futures in the day session, it's not after hours. It just follows Asian and European Markets.