Volatility reigns in earthquakes, hurricanes, stock market

Market Snapshot:

 

Last

Week Chg

Week %Chg

S&P 500 Index

1176.80

+53.27

+4.7%

Dow Jones Industrials

11284.54

+463.89

+4.2%

NASDAQ Composite

2479.85

+138.01

+5.8%

Value Line Arithmetic Index

2548.16

+138.86

+5.7%

Minor Cycle
(Short-term trend lasting days to a few weeks)

Intermediate Cycle
(Medium trend lasting weeks to several months)

Major Cycle
(Long-term trend lasting several months to years)

Neutral / Positive

Negative

Neutral / Negative

Volatility and uncertainty. Those have been the catch words lately. Some of us ensconced on the U.S. East Coast have also experienced some natural "volatility and uncertainty" as Mother Nature injected earthquake tremors and a hurricane into our physical world. But provincial chauvinism aside, "traditional" volatility and uncertainty have certainly been visible in the stock market over the past several weeks.

Unfortunately the current media definition of "volatility" has evolved to encompass not just up and down market movements, but also mere market weakness. The market drops 250 points in a session and its "volatile." Malapropisms notwithstanding, some also continue to suggest that economic and political "uncertainties" are driving the market. But as we scrape our cranial recesses, we can’t remember a single instance in stock market or economic history when there weren’t uncertainties. Has there ever been a time when the financial headlines blared, "Market uncertainties have vanished and investors are rushing to buy." Nope. Not in bull or bear. So we suspect we will continue to fuddle along in the perpetual darkness of market "uncertainty" which, on occasion, coincides with market "volatility."

But lest we spend the remainder of our Market Summary on semantics, fact is the S&P 500 and the other major indexes closed last Friday at about the same level as they closed two weeks ago. True that there has been some real "volatility" (our definition) since prices made short-term lows August 9, but net gains have been almost non-existent since then.

Which leads us to a few questions and observations…

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