The One Way, One Day Market
Momentous moves made, reversed overnight.
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The bulls are awaiting the verdict as to whether yesterday scored another 90% up day on the heels of the October 90% up day.
This is truly a one way/one day market: Momentous moves are being made and reversed the next day. The intraday and day-to-day volatility have been mind-numbing.
Is volatility ready to join Goldilocks on the junk pile of history? Is Goldilocks poised for a second coming as Mr. Volatility goes into hibernation, or is he just taking a well deserved breather?
As the VIX pulls back to 50% of its recent range and its 50 dma, my gut tells me that the new reincarnation of volatility may be directional and show up in multi-day swings as opposed to intraday and day over day reversals.
In other words, I expect to see a swing down from whatever high is scored near the S&P 1004 to 1025 vicinity, a big swing up and then an even bigger swing down. The big swing up will likely be capped by the 1170 to 1200 level, and the question is whether the decline from there will take out the lows.
If they do, it won't be marginally.
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