Markets are a Stacked Liquidity Network
An Authored Burst Higher Propagates Through the Liquidity Stack:
Aggressive buying lifts futures.
Dealers hedge options exposure.
Futures trade through fair value.
Arbitrage desks buy index baskets.
ETFs transmit the flow.
Components reprice higher.
Stocks didn’t “run out of shares.”
They repriced to preserve coherence across instruments.
Why Futures Lead
The instrument with:
Lowest friction
Fastest liquidity repair
Highest capital efficiency
moves first.
That instrument is index futures.
Why Stocks Lag
Stocks adjust more slowly because:
Liquidity is fragmented across venues
Alignment requires basket execution
The cash market has higher friction
The Core Point
Markets are not isolated supply/demand silos.
They are a stacked liquidity network — interconnected clearing layers that enforce pricing coherence.
Direction begins where friction is lowest.
Propagation moves outward.