OK, tell me again why such volitility on Wall Street in the last two months.?

Question

It's got to be some kind of record about up and down HUNDREDS OF POINTS IN ONE DAY. Am I the only one noticing this MOST UNUSUAL volitility? UP AND DOWN HUNDREDS OF POINT IN A SHORT TIME IS UNPRECIDENTED, I think. Please correct me if I am wrong.

Answer 1

Actually, this has been pretty mild volatility compared to other periods.  The volatility as measured by the Average Daily Range of the S&P 500 is well below what we saw during the sell-offs in January and March.  On a weekly basis, the volatility is nowhere near the levels we saw earlier this year, and at the bottom of the last bear market in 2003, as well as the late stages of the bull market that ended in early 2000.  

It will be likely that the volatility will only increase before we see a bottom in this market, so hold on to your shorts!

Scott Cole

www.kungfutrader.com

Answer 2

Actually, the market isn't that volatile these days.  It feels that way because it has mostly been going down lately.  (No one except short sellers complains about upwards volatility.)  If you look back to the 1999-2001 market, or the market in the fall of 1987 (when the Dow Jones Industrial Average fell 22.6% on Oct. 19, 1987), volatility was greater.  The way to deal with volatility is to diversify your investments, and not focus a lot on day to day market movements.  Day to day market volatility is like a mosquito bite--the more you focus on it, the more it will bother you.  If you want to get a better sense of where the market is really going, look at it on a week-to-week basis.

Answer 3

it boils down to the period of time you're examining.   over a short period, you may have high volatility b/c of market sentiments, a large presence of speculators or short-sellers, or even something like the end of the year approaching and cojmpanies wanting to unload a lot of holdings for tax purposes.

volatility is the name of the game, and all the big institutional traders using block trading programs help cause volatility 1) because that's just how it is when volume goes up, and 2) that's how they make money.  you need volatility and teh associated price movements to make money off of unhedged trading positions!

Answer 4

Too much selling. Financials are falling. Banks are going under. This is very similar to what happened in the 80's with the Savings and Loan crisis as well with what happened in 1929. Very similar. Bottom line is the stock market is correcting, and will continue to correct until more of these banks go bankrupt. We are in a bear market, and will continue to be in a bear market for the next 18 months probably. High oil prices have created a number of problems. Even though oil prices are now falling, the full effects of these problems won't be completely seen until the next 6-12 months. We are in a bear market, and there is no reason whatsoever to be buying any stock right now. There is way too much volatility. The world's stock markets are grossly overvalued. There have been too many excesses over the past 5 years, and now the world is paying for it. We are in a recession. Wait until the market bottoms out in a trough, and then buy if you want to buy equities.

Answer 5

I don't believe it is a record. I believe it was worse in the '70's.  Some of the cause of the fluctuation are: 1) high oil prices; 2) housing market overinflated and now coming down' 3) the govt deficit ; 4) people running up high credit card debt; 5) natural fluctuation: 6) politics--some people are investing in foreign stock due to the threat of having their money earned taxed out the wazoo and given to social programs.

Answer 6

First off.........don't use caps.........its rude.............

The international value of the dollar..............

Answer 7

It's smoke and mirrors gambling.  The Dollar's downward spiral is the main reason. Also for oil and prices on goods. Get ready. Things are going to get rougher. Smartness doesn't always equal Wisdom.

http://www.campaignforliberty.com/blog/?...

Answer 8

When there is fear, there is always volatility.  Traders overreact to every bit of news, good or bad.  No surprise there.

Answer 9

The stock market started 1970 near 1,000 and it was still there in 1980.   That's why i don't think this "volatility" is anything bad. There are hundreds of ways to make money in 2008.

So i don't think that a movement of 300 points in one day has any meaning.  And i would not say that it is volatile.  I wonder if you have made a lot of money recently and that is why you are asking.