Watching the complete market action from the opening drive to the closing bell is a unique experience that while "personified" accurately using Japanese candlesticks (a specific type of price chart favored by technical analysts), leaves out much of the raw emotions inherent in the investment business. This is particularly so during times of market volatility, where one hour can vary dramatically from the next.
For instance, what the hell just happened today? From the onset, the markets hit a slightly dissonant tone, off a few basis points from the prior close. By mid-day, all three major indices (S&P 500, Dow Jones, NASDAQ) were in the green, with the Dow challenging its all-time closing record while the NASDAQ was the clear intra-day leader, up over 1% against the prior. I assumed that the markets would hold on to a majority of these gains : after all, geopolitical tensions faded into the background as much of the mainstream focus was on a generally positive earnings season, with nearly 64% of reporting S&P 500 companies posting better than expected results.
How surprised I was to look up at the ticker tape and discover that only one of the three indices managed to post a gain, with the Dow adding on 32 pretentious points. That really is not the type of progress you would expect from investor sentiment when the underlying fundamentals of the flagship equity market in the S&P 500 have come strongly ahead of expectations.
Perhaps it's a reflection of people not appreciating how undervalued the fundamentals are against the technicals. It was Warren Buffet who advised us little folks to buy when others are fearful ; well, they sure look fearful today!
Then again, it could be that the smart money has left the stadium and are now waiting for the markets to determine the next move. These are the people that have access to the best information and rely on a systematic combination of qualitative and quantitative factors to help guide their decision-making process : if they are leaving (which they are), what does that say about the retail investor who is often the last person to know anything and is keeping his investment precariously exposed to the markets because his or her fund manager told them a wonderful story of a magical wizard called compounding interest and historical trends?
Once the smelly stuff hits the fan, it's often too late to do anything about it : the crowds have already gotten out at the best price possible and at that point, you would potentially be forced to sell at fire-sale prices. Either that or hold onto that day when you would be able to break even or sell at a profit.
Since I'm not quite sure when that day will occur, I'll take my chances with my flight to safety.