There is still a lot of money/credit sloshing around so in that sense, mucho liquidity.
On the other hand, if we are talking the depth of the book on individual assets/securities/names, you can see the potential for gap-downs if the crowd starts hitting bids. This is one of the reasons we didn't post much on the rotation into small caps, a realization that may be dawning on the promoters of that idea. Here's the recent action in the Russell 2000:
Liquidity is your friend.
From Marc Chandler at Bannockburn Global Forex:
Overview: The Antipodeans and sterling lead the G10 currencies today. The New Zealand dollar is the strongest, though the central bank is likely to deliver its first rate cut tomorrow. The Australian dollar rose to a three-week near $0.6610. Sterling was lifted by a stronger than expected employment report (though wage growth slowed) ahead of tomorrow's CPI. The yen and Swiss franc nursing modest losses. Emerging market currencies are mostly stronger, with a few central European currencies (not the Polish zloty), and the South Korean won and Taiwanese dollar nursing small losses.
Risk appetites appear to be healing. Outside of India, Asia Pacific stocks rallied, led by the return of Japan from a holiday-long weekend. Europe's Stoxx 600 snapped a four-day advance yesterday but is trading with a firmer bias today. US index futures are around 0.25%-0.60% higher. European benchmark yields are narrowly mixed, while the 10-year US Treasury yield is nearly two basis points higher at 3.92%. Gold posted a record-high settlement yesterday slightly below $2473. It has come back softer and hovering around $2460. Fear of an escalation of Middle East tensions helped lift September WTI 4.2%, its fifth consecutive advance. It reached about $80.15 yesterday, its best level since July 19. It is consolidating slightly below $80 so far today.Asia PacificJapanese market re-opened after celebrating the Mountain Day holiday yesterday.The Topix jumped 2.8% and bonds traded with a firmer bias....
