Within the first trading hour on Thursday, both the “SPDR S&P 500 (SPY)” and “Nasdaq 100 (QQQ)” dropped 1.1%, rallied 2%, then declined 1.3% before settling around midday while attempting to stabilize, following yesterday’s steep sell-off. This is seemingly the new normal and very “2020” — a year best summed up as: “unprecedented,” presenting unique opportunities for nimble and opportunistic traders. To date this year, there have been 42 days where the SPY and QQQ have moved above 2%; more than quadrupling the average number of 2%+ sessions in the last five years.
In fact, in 2017, there were only eight days that saw moves in excess of just 1% — one of the least volatile years on record. The SPY has now given back most of its year-to-date gains with both it and the QQQ’s still standing in the 10% correction territory. While I think we could see a short-term bounce, I maintain my stance from last week that the selling is not over.
Likewise, I think volatility will remain high well into 2021. My belief rests on several factors. First, it’s looking increasingly likely that the election will be contested without a resolution for weeks after November 3. Second, the coronavirus isn’t disappearing causing most of the world to keep retrenching in terms of reopening the economy. And finally, historical…
Thank you for reading this post, don't forget to subscribe!