Today is June 22 2012 , And tonight the Russell 2000 will under go a index re balancing which is going to prompt some further thinking in FB, and its future into an index.

(Reuters) - Nasdaq OMX conducted its highest-volume close of the year without a hitch on Friday, carrying out the rebalancing of the U.S. Russell indexes a month after it botched the market debut of Facebook Inc.

Nasdaq said it executed trades of 687.9 million Nasdaq-listed shares worth $9.5 billion, in 1.15 seconds, when the market closed at 4 p.m. Eastern time.

On a normal day, it executes 50 million shares at the close. (This re balance means fewer financials are now within the index)

Once this event happens we will consider it a giant future trade opportunity.

Eventually Facebook will/maybe added to the QQQ

Keeping this thought in mind- speculations on this event happening is guesstimated to be no sooner then December 2013, we we are not talking tomorrow, but the day will most likely come, and today's Russell re balance is prompting me to share this line of thinking, and its nice to see it ahead of time as something to consider.

(ETF investor reports states:)

"To be eligible for initial inclusion in the Index, a security must be listed on the Nasdaq Stock Market and meet the following criteria:

• the security’s U.S. listing must be exclusively on the Nasdaq National Market (unless the security was dually listed on another U.S. market prior to January 1, 2004 and has continuously maintained such listing);
• the security must be of a non-financial company;
• the security may not be issued by an issuer currently in bankruptcy proceedings;
• the security must have average daily trading volume of at least 200,000 shares;
• if the issuer of the security is organized under the laws of a jurisdiction outside the U.S., then such security must have listed options on a recognized options market in the U.S. or be eligible for listed-options trading on a recognized options market in the U.S.;
• only one class of security per issuer is allowed;
• the issuer of the security may not have entered into a definitive agreement or other arrangement which would likely result in the security no longer being Index eligible;
• the issuer of the security may not have annual financial statements with an audit opinion that is currently withdrawn;
• the issuer of the security must have “seasoned” on NASDAQ or another recognized market (generally, a company is considered to be seasoned if it has been listed on a market for at least two years; in the case of spin-offs, the operating history of the spin-off will be considered); and
• if the security would otherwise qualify to be in the top 25% of the securities included in the Index by market capitalization for the six prior consecutive month-ends, then a one-year “seasoning” criterion would apply."

HOW DO WE MAKE THIS INFORMATION ACTIONABLE?

Here comes the simple trade strategy, There are multiple funds out there who's sole job is to replicate and mimic the performance of the QQQs if a new underlying is added to any index, these people/funds become FORCED natural buyers of the underlying to continue pace with the index's performance.

This becomes the case on any addition, Standard and poors 500, Dow 30, Russell, QQQs ETC ETC.

The trade on these events becomes this simple, Enter ORDER to sell, MARKET ON CLOSE (MOC), depending on unbalances, and who you are trading with these used have a requirement of 20 minutes till the close, then this was revised depending on if you are going with or against posted imbalance. Check with your broker regarding MOC orders and conditions of timing- but the trade goes as follows.

Summary of NYSE rules for entering/canceling/modifying market-on-close (MOC)

• All MOC orders must be received at NYSE (and at AMEX) by 15:45 ET, unless entered to offset a published imbalance.
• New York Stock Exchange (NYSE) rules also prohibit the cancellation or reduction in size of any market-on-close (MOC) order after 15:45 ET.

Summary of Nasdaq rules for entering/canceling/modifying market-on-close (MOC)

• All MOC orders must be received at Island by 15:50:00 EST and cannot be cancelled after 15:50 EST.

20 min before close enter in MARKET TO CLOSE, this is stating you are selling at market on the final print of the day.

Understand that this is step one- we are not already long stock at this point.

I always found it interesting to enter these orders, and watch the trading action into the close knowing you are going to be included in the final print.

Watching the imbalances come out doesn't tell us much information because you can enter in MOC orders if you are fading the imbalance, the exchange whats net net buy and sells to match up so you can enter against the posted imbalance regardless of time.

but there are two points in which they post and update the imbalance so its interesting to see if this is growing or diminishing on its updated posting.

if this figure is growing it will add confidence to the play- if its netting out smaller on the update- the play may have less force.

Step Two: We want to have as little market expose as possible here, we are not trying to daytrade or pick a direction here- but what we are trying to do is buy Stock - ( in equal amounts to the size entered in the MOC order)

for example if this is entered in :20 seconds till the close - the work is done and we just watch-

If you are a tape reader like myself and watching the time and sales run through- you will see a lot of orders and alot of size.. and then one final GIANT PRINT- in which we will be participating with and our MOC order we hope is bid up by people wanting that new index addition, so they are not under exposed and seeking alpha to their own index. This print take time- afew minutes after the close, and the trade is over-