Pensions and other large institutional investors often rebalance their portfolios at the end of a quarter. We are approaching quarter end and a rebalancing would mean a large move out of bonds and into stocks late next week.
The S&P 500 closed last quarter at 1320. The futures have us at about 1200 as of this writing, an over 9% decline. The TLT closed last quarter at 93.19 and now sits at 113.5, a greater than 20% advance. The TLT likely overstates the rise in investors bond portfolios, but even if the advance is 10% this would lead to a large rebalancing.
A disaster in Europe will likely trump many of the factors I discuss. However, if the status quo is maintained or if Europe can stop a Greek default from cascading to the rest of Europe this is yet another factor that could put upward pressure on the market.