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Strategies & Market Trends : The Residential Real Estate Crash Index
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To: jmiller099 who wrote (196743)4/17/2009 7:01:30 PM
From: PerspectiveRead Replies (1) of 306849
 
I think the inverse funds and the levered longs are contributing to this. They rebalance daily, which means that somewhere near the close, they (or their counterparty) has to take corrective action that is pro-cyclical. Funny, isn't it. Whether you're levered long or short, in order to maintain constant exposure, you have to buy on up days and sell on down days. I would guess they do it in the final hour, exacerbating the final hour volatility.

BC
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