S&P 500 Snapshot: A Volatile Road To Nowhere
Doug Short | Oct 17, 2014 02:15AM ET
The pre-open economic news today was the big drop in new jobless claims , now at a 14-year low. Interestingly enough, index futures dropped on the news, perhaps because the actual trough in claims in 2000 was on April 15, 2000. It was preceded by the S&P 500 Tech Bubble peak three weeks earlier on March 24th.
Here is an overlay of new jobless claims (inverted) and the S&P 500 since 1990. I've highlighted that 2000 inverse correlation.
The S&P 500 opened lower and sold off to its -1.47% intraday low about 45 minutes later. The index then zigzagged to its 0.73% intraday high in the early afternoon. The volatile session ended by essentially going nowhere, up 0.01% at the close. The 2.23% high-low range was at the 98th percentile of the 200 market days of 2014. Yesterday's 2.94% high-low range was this year's most biggest range.
The yield on the 10-year Note closed at 2.17%, up 2 bps from yesterday.
Today's announcement of the latest 30-Year Fixed Rate Mortgage Average, at 3.97%, is the lowest rate since June of last year.
Here is a 15-minute chart of the past five S&P 500 sessions.
Here is a daily chart of the SPY ETF, which gives us a better picture of investor trading volume. In contrast to the underlying index, the ETF posted a fractional decline. Volume was massive, although off the surge yesterday, which was the biggest since November 2011.
A Perspective on Drawdowns
How close are we to a correction, generally defined as a 10% drawdown from a high (based on daily closes)? The chart below incorporates a percent-off-high calculation to illustrate the drawdowns greater than 5% since the trough in 2009.
Click for a larger image
For a longer-term perspective, here is a pair of charts based on daily closes starting with the all-time high prior to the Great Recession.
Get The News You Want
Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors. Prices of cryptocurrencies are extremely volatile and may be affected by external factors such as financial, regulatory or political events. Trading on margin increases the financial risks.
Before deciding to trade in financial instrument or cryptocurrencies you should be fully informed of the risks and costs associated with trading the financial markets, carefully consider your investment objectives, level of experience, and risk appetite, and seek professional advice where needed.
Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. The data and prices on the website are not necessarily provided by any market or exchange, but may be provided by market makers, and so prices may not be accurate and may differ from the actual price at any given market, meaning prices are indicative and not appropriate for trading purposes. Fusion Media and any provider of the data contained in this website will not accept liability for any loss or damage as a result of your trading, or your reliance on the information contained within this website.
It is prohibited to use, store, reproduce, display, modify, transmit or distribute the data contained in this website without the explicit prior written permission of Fusion Media and/or the data provider. All intellectual property rights are reserved by the providers and/or the exchange providing the data contained in this website.
Fusion Media may be compensated by the advertisers that appear on the website, based on your interaction with the advertisements or advertisers.