Volatility ReAwakens
Here's an excerpt from today's market commentary regarding prior one day high percentage sell offs:
Tuesday’s 400 plus point drop was a wake up call. Let’s
take a look at the most recent periods of major 3%+ sell offs, to see what the
markets did subsequently.
Note that single
variable comparisons are rarely valid; we prefer to control for multiple
factors rather than looking for just one single element as being determinative
of what the markets are likely to do in the future. Note also that these three
periods were part of the secular Bull Market of 1982-2000, and also reflect the
final bubble expansion of the NASDAQ. However, we thought readers might find
these studies of 1997, 1998 and 2000 as somewhat instructive:
1997 Market (Thai Baht / Asian Contagion)
1998 Market (LTCM)
2000 Market (Tech and Telecom Peak)
Thursday, March 01, 2007 | 04:23 PM | Permalink
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I strongly suggest checking out Tickersense's post on 3% corrections...fascinating!
Posted by: Fred | Mar 1, 2007 4:58:03 PM
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