This is my opinion, but these indexes and a lot of equities do not trade like markets anymore. There are human elements to a market that make something a market. When it's high speed robots trading against other high speed robots, not only is edge for the regular guy going away faster, but its no longer tracking the value of the thing. Why do you think value investing sticks to deeply undervalued stocks? Simply because with less analyst and news coverage there is significant edge in trading something the HFTs and big banks aren't looking at.
Take for example oil futures. There is a market there. Sure there is likely HFT arbitrage, but it's significantly less. There's not enough ability for the HFTs to manipulate it because there are other actors with just as much capital. Hedge desks from giant oil companies for example.
But when you look at the ES, YM, NQ, etc it's just noise. There's very little tradeable there because the indexes aren't tracking the market at large. Speculators serve an important purpose, but HFTs are not speculating. They're bouncing trades back in forth between each other, front running, and manipulating markets. Not in the "corner the silver market" manipulation. But in a "technologically lock everyone out of profit" sense.
This is the same argument penny stock gamblers use. it doesn't hold a whole lot of water.
