There's been a lot of hype in the media about the 'largest points drop ever'. A fairly meaningless statement when talking about an ever appreciating points base.
For reflection on yesterdays post, the market continues to act normally with higher volatility during re-rate periods.
The SPX closed firmly in the 'normal' zone (80th percentile fit)
This image above shows in blue the daily move rounded to the nearest 0.5%.
Green shows the count of the subsequent days move classified as 'N' - no retracement and 'Y' - retracement.
It shows last nights futures recovery also very typical with the 11th retrace in 24 ocurrences of a circa 5% fall in 23,240 days trading history on the S&P 500.
The main focus appears to be on ST/LT bond inversion & PE Max. For mine, PE Max being high is expected in a period of expansion in corporate earnings as it is a lagging indicator.
We're comming out of a long period of automated mean reversion strategies which have crushed volatility to sustained levels not seen before. If the bull run continues (as I predict it will) expect volatility as reversion strategies are tested.
