Liquidity Mystery

Markets will fight the range this week with an increase in volatility picking up the week of Sept. 10th. Stories about the lack of liquidity during high volatility continue to be the topic when discussing various financial instruments. Treasuries are receiving the liquidity vacuum spotlight. Traders are shocked. Why? Liquidity disappears when price swings begin to become more erratic. Always has, always will. Convincing others to stand in front of a financial freight train and make a market for everyone else is tough. If it were profitable, everyone would do it. Half of the time traders do not know where the market is going. The other half of the time they really do not no where the market is going. The latter is when liquidity disappears as bids and offers are so wide you could drive a truck through them. Sometimes it is better to be on the truck.