Volatility Comes Back In A Big Way
Yesterday they said that the market had its biggest runup in history prior to an election. Today they said the market had its biggest post-election drop. Go figure.
Today started off as mild profit taking, but the sharp drop in commodities as well as in financials turned into a full fledged rout.
Volume wasn't that heavy today, so I don't want to make too much of today's action - yet. If the market can stabilize, I still think it has more room on the upside over the next 2-3 weeks. But we need to see buyers step up.
I did not put any money to work into today's decline. The ECB meets tonight, and I want to see how much they cut rates. I am hoping for at least 50 bps, if not more. They really need to do this.
Also, on Friday we will get the nonfarm payrolls report, which will likely be weak. This could hit the market also, as investors seem to be spooked by each and every weak economic report. At some point, they will develop thicker skin, as I see weak economic reports continuing for the near future.