Why are the Dow Future 100 Points below Cash Market?

Discussion in 'Trading' started by BlueStreek, Mar 31, 2009.

  1. ES about 8 dollars below s/p 500, these are june contracts, but this seems a little strange: are futures markets ahead or behind the curve on this thing.

    I remember futures being 60 ahead of cash at times, but 100 below that seems unusual, is it just me? any thoughts?
  2. Black Wednesday
  3. this action is not normal, also the orderly decrease to the close was funny.
    something is up, I expect some news..
  4. PPT forgot to roll the contract?? :D
  5. end of quarter results based on cash market
  6. Asian markets will bring futures back.
  7. The Dow adjusted close yesterday was 7,522.02, what was the close for yesterday`s YM? (afternoon session).
  8. 7,494 at this time yesterday, that is a more normal spread.
  9. Possible explanations: A bunch of short positions have yet to close out their positions, artificially keeping the futures lower than "fair value".

    Enormous Hedging demand artificially keeping futures lower than they should be relative to the underlying.

    Bearish sentiment ahead of an earnings season that people think is going to be highly negative, and futures is just ahead of the curve.

    Simply mispriced.

    Theoretically this gap is too wide here and presents an arbitrage opportunity for an institution I would think.
  10. Remember the variance between spot and futures contracts back in October '87?
    #10     Mar 31, 2009