Want evidence this selloff isn’t like the others? Consider thatthe VIX, the market’s fear indicator, has now spent 11 straight sessions above 25 – a level that before August it had touched on just five days since 2011.
Or theStandard & Poor’s 500 Index, which through Friday has swung up or down an average of 2 percent a day for more than two weeks. Prior to Aug. 20, the 2015 average was around 0.6 percent. The Dow Jones Industrial Average has suffered declines of more than 270 points in five of the last 12 sessions, the biggest cluster of selloffs since the summer of 2011.
Chaos is proving tough to shake in an American equity market where concerns that economic growth is slowing in China is alternating with dread about the first Federal Reserve interest-rate increase in nine years. Buy-the-dip is broken, at least temporarily, and fatigue is setting in among traders at the start of what has historically been the worst month of the year for equities.
‘People are digging in for the market gyrating and volatility to hang around,’ saidAndrew Wilkinson, chief market analyst atINTERACTIVE BROKERS LLC in Greenwich, Connecticut. ‘For a long time people were having good years, and now they’re getting it handed to them,’ he said. ‘For anybody going through a broker or someone that had moved to start a hedge fund or something, this is a baptism by fire.’
This post was published at David Stockmans Contra Corner by Bloomberg Business ‘ September 6, 2015.
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