(I posted this same message on the Automated Forum, not knowing which is best to find someone expert on this subject.) Has anyone else noticed that the volume and volatility spikes at 8:30 EST are getting bigger and bigger? This weird behavior extends beyond the ES to the YM, NQ, and the premarket trading of Spyders, Diamonds, etc. I always thought these premarket spikes were some form of program trading related to European markets, but now I am begining to wonder what is up? The number of contracts pushed through in just 2 or 3 minutes has lately exceeded the normal volume of 2 or 3 minutes during market hours. Weird. Anyone know anything?
Usually reacting to news is a game played by the retail trader, not the big money hedge funds. The amount of volume involved is much too big to be small retail traders. Of course, it could be possible that the hedge fund gurus have been brought down to the level of playing news stories, but I would think this has to be a new variation in program trading arbitrage. Just trying to figure it out.
I agree with jeb. I wouldn't focus on it being odd as much as indicative of a market on edge. It is another sign to stay away from that carnage though. That's my opinion.