Who knows where global equities would be without the mysterious 2:00 a.m. futures buyer that shows up?
Sure, we were due for a bounce, I’d just be a lot less suspicious if these bounces didn’t have a habit of showing up at 2:00 a.m.
Somebody is running that game, and has been for a while. Maybe it’s just a big player like Citadel, but it’s been known about for so long that I am surprised it persists as a “thing” because these things usually get sniffed out and competed away.
Now we just wait and see how long it takes to digest this blob of money. The length will give us clue about where we are in the process. If it’s eaten up in a day or two, we’re near the beginning of the downtrend. If this provides a week long pop or more, then there may be a near-term bottom at hand.
We’ll have to keep an eye out for how many rescues are attempted along the way as those will muddy the signal.