who is bidding up the futures?

S&P 500 futures got to about half a percent above fair value, yet Shanghai is flirting with a new many year low, other Asia markets are not doing anything, we had a total squeeze in to the close - just wondering who decides to keep bidding up futures rather than sell them at a time like this? nervous shorts? hedgies playing games?

 

Just a theory here...

The index futures trapped a whole heck of alot of shorts not only overnight but during regular market hours. Then even during the RTH, market lows were put in right away and everything closed on the highs. Now you have first of quarter Employment Report coming up, which in recent years, has been another gap up special.

DAX, ESTX50, etc, etc closed much lower during their regular hours, you can never underestimate the fear of the shorts in this insane market these days. It's been a pretty consistent pattern. Shorts are perpetually scared and scarred these days...

 

a look at the open interest in various futures markets in the WSJ tomm. might give some
hints ... as to what this was today

i.e. short covering ... new longs / shorts etc

 

What was with the big sell off on the HSI an hour and a half before the London bombings? Or are my hours screwed up.

 

I've read some where that since 9-11, there has not been a -4% day, very odd.

 

Well we are closing in on 600 days without a -2% down day. Thats even more ridiculous.

 

My data indicates the last -4% or more down day occurred on 9/3/2002, 716 trading days ago.

The lack of larger than average moves, however, should not be too surprising given the extended period of volatility in the market between 1996ish and 2003 and the need to correct for it by entering into a extended period of low volatility.

The low volatility environment probably has another 3 to 5 years to go before completely working off the massive volatility of the late 1990s / early 2000s.

 

Futures are continuing up on risk aversion as primarily European stock invested monies were rotated over into the U.S. stock market as were many treasuries investors. Somewhat funny that today the U.S. stock market became "safety" for the day-------not sure how long this affect will last, maybe only a few days.

 

thanks - the European safety rotation is interesting - but I thought someone like Jack ?Borugian on Bloomberg Thursday said European managers had dumped the U.S. market as part of the overnight plunge - how do you know that significant "European" money moved back into the U.S. markets contributing to the big rebound?

 

They sure did -- talk about sloppy sellers. Sheesh.