Michael Haddad
6:17 a.m. Is it fair to say that the Dow Jones Industrial Average is detached from fundamentals right now?
We don't mean at this very minute, which sees Dow futures up 69 points, or 0.3%, while S&P 500 futures have gained 0.4%, and Nasdaq Composite futures have risen 0.3%
No, we mean the market's trading action, which seems completely devoid of anything resembling reason. Monday's Christmas Eve tumble was the worst on record, and that was followed by Wednesday's 1086 point rise -the largest point-gain on record-and yesterday's massive reversal that saw the Dow go from down more than 600 points to closing up nearly around 260 points. These things aren't normal, especially without any meaningful headlines to provoke them. And we're not the only ones saying that. And it makes us wonder just how much of the moves is due to a lack of market liquidity combined with a lack of human beings trading.
And so we go back to our original premise : A recession still doesn't look to be in the offing, so we remain hopeful that the bull market remains intact. But we also know that it has a lot of issues it needs to work through-and one is this kind of volatility.
When the market gets like this, all we can do is get our allocations right, and ride it out.
Write to Ben Levisohn at Ben.Levisohn@barrons.com
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.
