Talk about volatility
The volatility has been quite remarkable lately. As I mentioned yesterday, it will be tough to fight your emotions. You know you had a good day when the I fund is up 1% and it brings your daily return down. So why all the excitement yesterday? You may have heard that Ben Bernanke was nominated as Alan Greenspan's successor for the open Fed chairman position when Dr. Greenspan retires at the end of January.
Apparently this a normal reaction when a new chairman is nominated. The day of Paul Volker's nomination, the S&P rallied 1.1%; after Greenspan's nomination, it jumped 1.7%. One month later, the S&P was positive by 6.9% and 5.0%, respectively, but within three months both times equities topped out and suffered nasty declines.
Chart provided courtesy of www.sentimentrader.com
In both cases the market seemed to top about 50 days later after some very impressive gains. As an FYI, the week of December 12 would be about 50 days from yesterday. Something to keep in the back of our minds.
The way the market has been lately it would be difficult to predict what might happen next. A healthy reaction would be to see a little digestion of the gains by either moving sideways or slightly down for a day so. The question is, how healthy is the market?
Well, as a native New Yorker living in Utah, I'm going to take advantage of being able to watch the Jets play on TV on Monday Night Football. It's halftime as I write this and they are getting clobbered, but I'll take it when I can get it.
That's all for today. Currently 40% C, 30% S and 30% I fund. Thanks for reading.
** Administrative note:
The Item of the Day seemed to go well on its first day but I had a small problem with PayPal in that after the early sale, the item was still being shown as available. I was told by PayPal that it would show the item as sold automatically. Instead a second person was able to go in a send a payment before I had a chance to take the item offline. Whoops! So the "Item of the Day" is down until I figure out how to handle that. Thanks!
The volatility has been quite remarkable lately. As I mentioned yesterday, it will be tough to fight your emotions. You know you had a good day when the I fund is up 1% and it brings your daily return down. So why all the excitement yesterday? You may have heard that Ben Bernanke was nominated as Alan Greenspan's successor for the open Fed chairman position when Dr. Greenspan retires at the end of January.
Apparently this a normal reaction when a new chairman is nominated. The day of Paul Volker's nomination, the S&P rallied 1.1%; after Greenspan's nomination, it jumped 1.7%. One month later, the S&P was positive by 6.9% and 5.0%, respectively, but within three months both times equities topped out and suffered nasty declines.
Chart provided courtesy of www.sentimentrader.com
In both cases the market seemed to top about 50 days later after some very impressive gains. As an FYI, the week of December 12 would be about 50 days from yesterday. Something to keep in the back of our minds.
The way the market has been lately it would be difficult to predict what might happen next. A healthy reaction would be to see a little digestion of the gains by either moving sideways or slightly down for a day so. The question is, how healthy is the market?
Well, as a native New Yorker living in Utah, I'm going to take advantage of being able to watch the Jets play on TV on Monday Night Football. It's halftime as I write this and they are getting clobbered, but I'll take it when I can get it.
That's all for today. Currently 40% C, 30% S and 30% I fund. Thanks for reading.
** Administrative note:
The Item of the Day seemed to go well on its first day but I had a small problem with PayPal in that after the early sale, the item was still being shown as available. I was told by PayPal that it would show the item as sold automatically. Instead a second person was able to go in a send a payment before I had a chance to take the item offline. Whoops! So the "Item of the Day" is down until I figure out how to handle that. Thanks!
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