Yesterday market down a 100, now up a 100

[Fedup]

I doubt that it will go down 20-30% just like that. It has to have very good reason. But brace for more turbulence tomorrow, judging from the Asia markets after hours.

 

[38Chevy454]

+/- 100 points for the DJIA in a day's trading is the new normal. +/- 200 points is a bit more of a swing and not as common. Better to think in terms of percentage, but even better to think in terms of longer timeframe. Such as Jan 1 to June 30 within a year, or Jan 1 to Dec 31 covering 1 year's timeframe. In other words I don't get caught up in the daily ups and downs.

As for what makes the market do these daily swings, as stated it is only clear in hindsight. Generally the market likes stable and consistent. When something occurs that is not, the market tends to knee-jerk reaction. Then the next day it tends to correct that over-reaction. Plus whatever news of that day is affecting the market buyers and sellers.

 

[Totoro]

Flat market for me now YTD .. USD/EUR effects.

 

[target2019]

Ok, how about this: "People all over the world, join hands, start a love train, love train, ride, let it ride, let it ride, Let it ride..."

Very timely. My train is visiting foreign markets.

Grab your ticket and your suitcase, thunder's rolling down this track
Well, you don't know where you're going now, but you know you won't be back

 

[audreyh1]

I think folks got used to low volatility. I remember many periods when the DOW went up and down >100 points every day, and that was at half today's levels!

 

[jollystomper]

It is interesting that many news outlets focus on the points the markets are down vs the percentage it represents. CNBC had big banner crawlers "DOW DOWN 200 POINTS" early yesterday afternoon, showing a graphic of how many stocks where in the red, etc. You rarely see a headline "DOW DOWN ABOUT 1%", I guess they figure that would not panic as many people.

 

[ESRwannabe]

I thought the market was based on earnings, dividends and greed(P/E). This is the BCG layman terms definition. I know they are other things i learned in here options etc. So how did we get a 250 point swing between yesterday and today? Was this the the greed/fear factor? This the buy on the rumor sell on the news? Robo, trigger trading? Active managers? (BTW I love you active guys. we need more people investing in them as i fear everyone will index with me and we go bust. Thanks in advance for all answers.

Hmm, I think for the last ten years it been mostly based on QE infinity.

 

[OldShooter]

Given that a 20%+ market decline has only happened 8 times since 1926 ...

Do the math. That's about once every 11 years. ... and 2007/8 was how many years ago?

Not that these things arrive on a schedule, but 8 in 90 years says that they are not black swans.

I doubt that it will go down 20-30% just like that. It has to have very good reason. ...

Yes, but the reason is usually identifiable only in the rear view mirror. And sometimes the reason is not clear even then. Further, if the reason could be foreseen the event could be predicted, which is never the case.

 

[NW-Bound]

No, certainly not black swans.

More like the run-of-the-mill swans I recently saw on Lake Geneva, or Lac Léman as the French like to call it.

Do not recall seeing any the previous time I was in Geneva, but this time they were a dime a dozen. Maybe in the same manner, 20% market declines will be more frequent now?

 

[Blue Collar Guy]

No, certainly not black swans.

More like the run-of-the-mill swans I recently saw on Lake Geneva, or Lac Léman as the French like to call it.

Do not recall seeing any the previous time I was in Geneva, but this time they were a dime a dozen. Maybe in the same manner, 20% market declines will be more frequent now?

The 3rd one is yelling sell, sell, sell.

 

[Koolau]

I thought the market was based on earnings, dividends and greed(P/E). This is the BCG layman terms definition. I know they are other things i learned in here options etc. So how did we get a 250 point swing between yesterday and today? Was this the the greed/fear factor? This the buy on the rumor sell on the news? Robo, trigger trading? Active managers? (BTW I love you active guys. we need more people investing in them as i fear everyone will index with me and we go bust. Thanks in advance for all answers.

I guess the ups and downs are the reason we do index instead of joining the "game." I know I'm not smart enough to figure out the right moves - other than to stay invested. I'll let everyone else have all the "fun!" Indexers RULE! YMMV