Pragmatic Capitalism

Practical Views on Money, Finance & Life


I don’t know if any characteristic of this massive 6 month rally has been more apparent than the huge futures run-ups we’ve seen at random points during the trading day.   Without news, the S&P 500 futures get gunned on huge volume and surge higher.  I’ve seen it at least every other day for 6 months.  It tends to occur on low volume days such as the one we’re currently experiencing.  As you can see in the chart below, the futures are getting gunned on massive volume without any coinciding volume in SPY.  This means an institution is jamming the futures higher knowing that they can drive the market higher on no volume.  Effectively, they can take out every asking price with a large enough order and immediately create a 0.25% bump in the market in no time.  If you’ve been wondering why we’ve seen huge surges on low volume days and conviction high volume selling on down days this explains much of it.  I don’t know if there is malfeasance behind this or if the buyer is simply too stupid to input trades at the bid (like most rational investors do as they try to achieve the best low price), but this is certainly an odd phenomenon that I cannot recall occurring so routinely over the course of my career.  Who is the mystery institutional buyer that just needs to place their huge block orders with such urgency?


Old video here courtesy of reader L2, but it’s still pertinent:

Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC.Orcam is a financial services firm offering asset management, private advisory, institutional consulting and educational services.He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.
Cullen Roche

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