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LIVE MARKETS-October volatility par for the course
Dow Jones Industrial Average DJI | 47954.99 | +0.22% |
CBOE Volatility Index | 15.41 | -2.34% |
S&P 500 index SPX | 6870.40 | +0.19% |
NASDAQ IXIC | 23578.13 | +0.31% |
PHLX Semiconductor SOX | 7294.84 | +1.09% |
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OCTOBER VOLATILITY PAR FOR THE COURSE
Volatility is back, and that should not come as a surprise to investors after the S&P 500 .SPX went 33 days in a row without a 1% move in either direction and since October is a month when "big moves" are more common, says Ryan Detrick, chief market strategist at Carson Group in Omaha, Nebraska.
"No month has seen more 1% up or down days than October and it isn't even really close. To see some big moves this October so far is actually par for the course really," Detrick writes in a note Wednesday.
On Thursday, the three major U.S. stock indexes started out higher but were down sharply by afternoon trading.
Detrick says October is also known for some of the biggest market crashes, noting the crashes of 1929 and 1987 as well as one in October 2008. The market also had "huge declines" in 1907 and 1917, he says.
In addition, October is known as "a bear market killer," Detrick says, with five of the past 12 bull markets starting in the month of October.
But, he says, the current U.S. bull market recently hit the three-year mark, and just once has a U.S. stock bull market made it to third year without making it to a fourth - "and that was 60 years ago."
"The past five bulls that made it this far all made it to at least year four, and the past four all gained at least double digits during year four," he writes.
"The bottom line is once a bull market makes it this far, they likely continue and that is something we still expect this time as well."
(Caroline Valetkevitch)
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