Donald:" sector rotation..."
...yes, there is some apparent sector rotation, Don - into areas like DRG.X, some commodity-based cyclicals, perhaps some fixed-income vehicles - this kapital appears to be seeking lower volatility, some sense of "safety".
But imho, this is an effect, rather than a cause of volatility.
...as you may have heard, I've gone out on a limb - stated that imho there will be "no sector" that investors can rotate to, which will hedge or prevent portfolio decay; thus, "no exit".
otoh, "PING-PONG" pricing is an excellent metaphor (^_^)
DownTrends exhibit these sudden, explosive rallies, as you know.
The "rallies" are difficult to trade; the reason is that futures will open way up, and the market is likely to sell-down all day long.
If there is some carry-through - say, a solid white candle the following session - it is unlikely that the trader will get a doji or shooting star session by which he/she can exit flat or, flip = short sale entry point, either.
On an (American-style) stock chart, a novice would look at some rally and say to us, "gee - you must have made a pile of dough on this recent, 300-point DOW gain". And we would have to say, "no... unfortunately there was little or no opportunity for an entry point, no feeling for extent by which to gauge my exit point ".
-Steve |
