Be honest. Were you freaking out today?
For a little while there it was getting kind of crazy. Pretty much everything was down – stocks, gold, oil – and down big. The bond market was going great guns. Yields were down like 40 basis points in the Treasury Bills, 30 bps in 2 year Notes, and double digits all the way out the rest of the yield curve. The dollar was up.
Then the Fed came in. The dollar did a complete turnaround. Gold went from down $20 or so to up something like up $10 at some point. Oil never got into the green on the day, but it was way off its lows when the dust cleared. Stocks clawed back a large portion of the losses, though Treasury yields remained way down all day despite also giving back some of the worst.
So at what point did you just stare at the screen wondering what the heck was going on and what sort of insanity was going to happen next?
It’s OK. You can admit it. We’ve all been in that situation before. Hopefully you were practicing good risk management, though, and didn’t get nailed too badly. Or maybe the craziness all worked in your favor.
This sort of volatility is one of the tricky parts about bear markets. They have a strong tendency to go down fast and rally fast. Take a look at the Dow or any of the major stock indices during the 2000-2002 period. You’ll see lots of sharp up and down action. That will give you and idea what we could be in for here.
My personal story is that I took a few hits in some positions, but nothing severe. The market strategy I do for my job was frustrating, though.
What about you? What was your story for today?
If you like this post or find it informative, I encourage you to sign-up for the newsletter.
Also subscribe to the blog feed and/or follow via Facebook or Twitter.
About the Author
John Forman, author of this blog, has traded for more than 20 years, is a professional market analyst, and authored The Essentials of Trading. He is an active participant in trading forums, consults for trading related businesses, as published literally dozens of trading articles, and has been quoted in a number of books and in the media.
** See John’s full bio.
Similar Posts:
- Why are stocks and the dollar trading inversely?
It’s not QE 2, QE 1.5, QE Lite or anything like that!
