The Joy of Market “Mini-Panics”

The trading range in the Dow Jones this week (at the time of writing) has been roughly 800 points (high to low).  

It only feels worse because it’s travelled that range back and forth three times already. 

On Monday we saw the move down in the morning and then back up off the lows by nearly 450 points.  

Tuesday saw a feeble effort to bounce back toward the lows of last week. Wednesday opened near the highs of Monday and then spent the day moving back down to that day’s lows.

Total distance travelled: 1,950 points.  

The net change from Friday: Roughly 900 points.

I’m telling you all this because during September we’ve basically corrected much of the NYSE broad markets' headway since the start of summer.  

In fact, the close on June 4th before the "recovery" gap on the 5th is just a few points lower than the close yesterday.

Here’s a snapshot:

The other indices are all skewed by tech's run. And all are stronger overall for the same reason.

These "mini-panics" are a normal part of all recovery processes. 

Though I, like you, wish they were not. 

Have a look at the thin red box. It highlights the same broad trade range of mid-summer. 

While the closing summer rally took the market just above this range it’s perfectly normal for trade ranges to be tested…sometimes more than once. 

The good news is that improvements abound internally, even as all the selling and nerve-wracking chatter covers the airwaves as the election approaches.  

Understand this: There will be no good news reported.

Panics make for better headlines and more eyeballs.

And they also create value by shaking the weak hands from the trees before the next rise.

Pray for more.