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“One doesn’t recognize the really important moments in one’s life until it’s too late.” – Agatha Christie
It was a pretty quiet night in markets, but things have taken a turn for the worse since Europe opened for trading. What was looking like a flat open for the markets about four hours ago is now looking more like a decline of close to 1%. In yesterday’s post, we noted that despite the big moves following the weekend’s events neither crude oil nor gold managed to take out their prior highs from last week. Well, this morning both are rallying again, and while gold has yet to take out its recent intraday high, WTI is trading above $100 per barrel and at new multi-year highs. Bottom line is that no one knows where this is all going, so it’s probably best to avoid making a big stand in one way or the other but use extreme market moves (in either direction) to your advantage.
In economic news today, investors will be watching Markit Manufacturing at 9:45 and then Construction Spending and the ISM Manufacturing report at 10 AM.
Read today’s Morning Lineup for a recap of all the major market news and events from around the world, including the latest US and international COVID trends.
Yesterday was the 39th trading day of the year, and it was also the 39th straight day where the intraday range of the Nasdaq 100 ETF (QQQ) was more than 1%. Seems like a lot, right? Looking back over the last ten years, 39 straight trading days of 1% ranges on an intraday basis ranks as one of the longer streaks we have seen. The longest streak during this period was 46 trading days coinciding with the COVID crash, and besides that, the only one that was longer was the 41 trading days ending 1/10/19.
While the current streak ranks as one of the longest of the last ten years, it is nowhere near the longest on record. In the chart below, we show streaks of 1% intraday ranges in QQQ going back to its inception in early 1999. Notice anything in the chart? From early 1999 through October 2003 – a period encompassing more than four and a half years – QQQ traded in an intraday range of more than 1% every single day! How’s that for volatile? The current streak of 39 trading days also pales in comparison to streaks of more than 100 trading days that QQQ experienced during the financial crisis, but in the chart, those streaks barely even register to the 1999 to 2003 period. As volatile and hectic as the last eight weeks have been for markets, it’s still nothing compared to the ‘old days’.
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