Wednesday, November 2, 2011

A Chart Of Recent S&P500 Price Volatility – November 2 Update


This post is an update to recent posts, that began on October 6 ("A Chart Of Recent S&P500 Price Volatility") on stock market volatility.

While I track many different measures of volatility, I find the following chart to be both simple and clear in depicting the recent outsized volatility in the stock market.

This chart depicts the S&P500 in 60 minute intervals from July 20 through yesterday’s close.  As such, it encompasses the progression of the stock market since its July 25 daily high of 1344.32:

(click on chart to enlarge image)(chart courtesy of StockCharts.com)


The blue line is a 50-period moving average.

I continue to believe that this volatility is notable and has important implications.

As I wrote in the above-referenced October 6 post:
What I find notable is the frequency and extent of the price volatility.  As one can see, there have been several episodes of advances and declines of roughly 80-100+ points in rapid fashion – some even happening over the course of a few days.
While there are various ways to interpret such volatility, my overall belief is that such is (yet another) cautionary sign.
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The Special Note summarizes my overall thoughts about our economic situation

SPX at 1218.28 as this post is written

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