Category: Dr. Duke's Blog
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What can I say? Scary? Roller coaster? Volatile? Impossible to rationalize? I have run out of words to describe this market.

The markets dealt us another one of those days, plunging like there was no bottom, but then recovering much of the loss in the last hour of trading. One of the lessons I am learning is not to panic early; wait until late in the day to hedge positions. Of course, I still closed several stock positions this morning, but I waited to see if hedging my condor put spreads on SPX and RUT was necessary.

SPX lost $27 when the dust settled, closing at $1853. SPX hit a low earlier today at $1828, very close to the low hit intraday on January 20th. RUT traded similarly, closing at $956, down $16. Today's intraday low on RUT was $956, very close to the January 20th intraday low. The price action in the markets certainly looks like a retesting of correction lows, but the constant drumbeat of "end of days" commentary is disconcerting. The implied volatility on SPX, the VIX, rose to 26% today - hardly panic levels. Normally, I would interpret this volatility as suggesting that the large institutional players aren't that concerned. But that doesn't match any of the financial commentary.

Trading volume was mixed with increased volume of the S&P 500 stocks trading at 3.9 billion shares vs. the 50 dma at 2.8B. Trading on the NYSE was down 8%, but higher by 12% on NASDAQ.

What is a trader to do? In short, hide. I still have a few positions open, but I am mostly in cash. I thought we were seeing the bounce January 20th, and I ventured out and took a hit. I will be far more cautious about getting back in the market.

There wasn't any significant economic data out today. Oil prices were down modestly. It's unclear what drove the intense selling this morning. Speculation of an imminent recession here in the states was common as were the usual worries about China.

Take two aspirin and go to bed. I'm going to study my thesaurus. You millenials will have to Google that.