Volatility rules

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The end of a major trend is usually marked by a significant increase in volatility. This seems to be what is happening to the equity bull market that began back in 1982. It has weathered a number of storms over the years, as traders kept faith with the underlying trend. But this week’s Barrons, the US investment magazine, notes that the recent collapse has been marked by unprecedented volatility.

It points out that that there have been nearly 15000 trading days on Wall Street since 1950. And in all this time, there have only been 68 days when the Dow Jones has gained or lost more than 4% in a day (33 down, 35 up). Apparently, 28 of those days have occurred in the last 3 months. It seems that the Wall Street bull market may be joining the baby-boom generation, which sponsored it, in retirement.

About Paul Hodges

Paul Hodges is Chairman of International eChem, trusted commercial advisers to the global chemical industry. Paul is also an invited member of the World Economic Forum’s Global Agenda Council. The aim of this blog is to share ideas about the influences that may shape the chemical industry over the next 12 – 18 months. It will try to look behind today’s headlines, to understand what may happen next in important issues such as oil prices, economic growth and the environment. We may also have some fun, investigating a few of the more offbeat events that take place from time to time. Please do join me and share your thoughts. Between us, we will hopefully develop useful insights into the key factors that will drive the industry's future performance.


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