TideGoesOut (< 20)

Some thoughts on volatility

March 07, 2009 – Comments (0) | RELATED TICKERS: ATVI , ORBC , TTM

Looking at my own stocks (currently 5...ATVI, ORBC, TTM (Tata Motors), HUN and SNT), I see that the three most stable are dropping their volatility and the two 'chancier' (in my estimation, of course) stocks appear to be doing the opposite...becoming more volatile, with greater highs and lows.

What I suspect this means: big investors are coming back into the market. Slowly, but they are coming.

As stated before, I like to think about these trends in terms of common sense and basic human psychology (I don't go in for TA, though I do see how much of that is just an attempt to quantify the human psychology aspect - unfortunately, I don't think they are spending effort quantifying common sense). What I'm seeing right now is people tired. Tired of the uncertainty, tired of waiting, tired because of sleepless nights worried about what's behind Door #3.

Tiredness is what I consider the third option to the basic human reactions to "flight or fight" when faced with an adverse situation. Perhaps tiredness is the wrong term..."resignation" maybe. In this case, the fight has been whether to bring their money out of safe shelters and into the market, hoping for gains. I think we're nearly there now. I think the time is right for folks to trickle back in.

...

So, I was right about Friday. Less than 1% gain.

Dow     6,626.94     +32.50 (0.49%)
S&P 500     683.38     +0.83 (0.12%)
Nasdaq     1,293.85     -5.74 (-0.44%)

I suspect another week or perhaps two with similar, as the above-stated trickle begins.