• Study of the Week: Is a Lot of Volatility Bullish?

    by  • June 18, 2013 11:44 am • Broad Market Analysis, Quick Hits, Study of the Week • 1 Comment

    Volatility is back.  The Dow has closed up or down 100 points five consecutive days.  And as of noon, the Dow is up more than 100 points, so there’s a shot at six straight.

    Digging into it, since 1997 there have been 22 other times the Dow has moved more than 100 points five days in a row.  Looking at the results, near-term this isn’t very bullish.  In fact, a month later it is down 0.89% on average and up just 45% of the time.  Sure there are always exceptions, but usually a lot of volatility tends to happen during corrections.  

    Here is a list of all the 22 occurrences.


    Ryan Detrick is the Senior Technical Strategist at Schaeffer's Investment Research in Cincinnati, Ohio. He joined Schaeffer’s in 2003 and is a frequent speaker and writer on stock market and economic issues and is widely sought after by financial media for his expertise and commentary. Mr. Detrick is a common guest on CNBC, Fox Business, and Bloomberg Television and has been quoted in outlets such as The Wall Street Journal, BusinessWeek, USA Today, Reuters, the Associated Press, and others. With a decade of financial industry experience in the investment and financial services area, strengths include short-term trading with an eye toward timely technical- and sentiment-based trading opportunities, and advanced option trading strategies. Mr. Detrick received a BA in finance from Xavier University, an MBA in finance from Miami University, and has earned his Chartered Market Technician (CMT).


    One Response to Study of the Week: Is a Lot of Volatility Bullish?

    1. alwayschallenging
      June 18, 2013 1:21 pm at 1:21 pm

      Interesting, but the bulk of occurrences happened after major market losses – 2002, 2008, 2011. I’d feel more comfortable about the results if the past several months hadn’t been strong.

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