Now That's Volatility
Today looked like it was going to be a real bummer, as the market gave up all of its early gains and went on to new correction lows. But low and behold, the market then staged a late rally to come all the way back to positive territory.
The Dow, if you look at how much it was up, then down, then up again, logged over 400 points of travel today. That's volatility. Volume spiked also. But with the markets finishing in positive territory, we could be seeing the making of a short-term bottom.
Here are some interesting stats:
- There were 614 new lows on the NYSE today- selling exhaustion?
- ISEE fell to 96;
- CBOE put/call finished at 1.12
- ARMS Index topped 1.40 intraday
- VIX fell -4.3%
- Europe closed higher across the board
- Asia put in big upside reversals
If you look at the daily chart of the DIA, SPY, IWM, etc., you will notice what we call "long tails". That is when you have a big intraday drop, but the stock/index rallies to close near its highs for the day.
Though not as pronounced, this type of action is similar to what we saw on August 16th, the last tradeable bottom. This is why I think that we may have put in some sort of near-term low today. I know I'm sticking my neck out, but that's how my gut feels.