To put the recent market moves in perspective here are some returns from the GFC of the SP500 through one of it's more volatile periods. These are log returns from a very volatile 1 month period in fall 2008. At this point the market was still 5 months ish from bottoming and the SP would drop another 37%.
9.219%, -5.276%, 0.455%, 4.112%, 1.360%, 3.928%, 5.911%, 1.140%, 7.922%, 1.183%, -10.957%, 0.534%, 9.470%, -4.163%, 0.623%, -4.658%, 3.128%, 6.295%, -1.255%, 3.512%, 3.228%, -10.246%.
In the period from Aug 15/08 until June 9/2009 we had 58 trading days with moves up or down of greater than 3%.
Trying to pick a spot to get in at without some sort of rules through this type of volatility is enough to turn many guys into mental cases. Not saying we are going to experience the same chop for as long as back then but it's a real possibility. The last several days have given us a taste of extremes in volatility. Be prepared to possibly see more extreme daily moves.
(Don't take this a gospel as it's just my quick crunch of the numbers on excel. Verify for yourself. Log returns for daily returns.)
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There are some who can live without wild things, and some who cannot. Aldo Leopold
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