Don't Hit the Panic Button Yet

The early morning buzz had all the flavor of moldy cheese. Europe blowing up, Japan ailing and the U.S. stock market futures diving had everyone reaching for the panic button.

But it hasn't unfolded according to script. At midmorning, the major measures are certainly down, but not down in the way the early indicators had threatened. Instead of plunging to another eye-popping loss, it seems that things have already started to stabilize. Things remain fragile, but the anticipated blood bath has yet to unfold.

Why? According to trading desks, a big hedge fund is moving or has moved a big basket of European stocks -- billions. In order to move that kind of product, institutions bid prices lower to find buyers and increase liquidity. This one-time event would explain why the markets whooshed lower and then started bouncing higher. ...