Why zero risk?

Discussion in 'Index Futures' started by dividend, Jun 29, 2007.

  1. Hello. What are the conditions that make this market for the past 2 years "zero risk"? The explainations that I have read are rather incomplete. So I would appreciate it if pros could elaborate.

    Right now the explaination that seems to make sense is the liquidity from central banks (also the greenspan put). However, this doesn't really explain the psychology on how and why investors buy the dip "fearlessly"...
  2. 2ticks



    It is an obnoxious, sarcastic, stick-it-to-the-non-bullievers comment. (And has now morphed to stick-it-to-the-non-bearlievers.)

  3. Hello and thanks for the reply and PM...

    I still wonder what had induced pro investors to become confident enough to buy the dips throughout the up trend.

    When I look at the 5yr chart I see selling with volume at the bottom of the channels of the uptrend. This would mean that, presumably, non-professionals were selling in quantity and pros were buying.... However, at any given time the market could have "cracked" and gone much lower leaving the buyers wrong.

    Someone was confident enough to buy the dip and well capitalized to absorb the large selling pressures at those points. I guess that only pros would have the capital to buy and support the market at these times.

    What I ponder is what made buyers so confident to buy in the face of all that selling?

    I observed this happening in late February as well, during 400-500 point sell of the DJI. There clearly were buyers that day and making it known they were buying, when it seemed like nonpros were selling everything and gone into hiding.

    Why did they buy and not join in the selling? Presumably large buyers could also have chosen to sell instead and smash the market, but they didn't do that.

    My guess is that large buyers were previously large short sellers as the market moved up, and thus would buy in (to cover, or even go net-long) if the market did something crazy and selloff many hundreds of points in a short time.

    Are there any pros that bought in at those dips and be willing to share some of your thoughts as to why you bought at those levels? Thanks.
  4. 2ticks


    No PM from me. You've confused me with a phisherman.
  5. Aint that the truth
  6. sure there is..

    just buy and ye shall be rewarded with FREE MONEY from HeliBen $$$