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Charts & Analysis

2% Down Is Big? Only 6 Such Days In The Last Year, Up or Down!

Markets fall 2% today on what seems to be “Global Volatility”. We think it’s because “prices fluctuate”.

They haven’t moved that much recently and look how little we seem to have moved in recent times:

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We have had just six big days in the last full year:

  • Two big updays (2%+) in May 2014, in the run up to elections.
  • One big down day (-2%) in July 2014
  • One -3% and a +2% in Jan 2015 on similar global trouble
  • And today, the -2% round

The real fear: the US will raise rates, and that will kill the world.

Apparently not, because even foreign investors bought over Rs. 800 cr. today in stocks. They’ve been strong buyers.

Never mind the explanations – the point is, stock prices fluctuate. They’ve just not fluctuated enough recently, judging from the reaction I get when I say that a 10% retracement from the top is normal and should happen every once in a while. No point predicting it; just keeping yourself nimble is enough.

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  • Gold Bug says:

    This knee jerk reaction of markets may not be fear of Fed raising interest rate. Rather it may be due to “what surprise Fed will unleash on the Market and the Value of Dollar”.
    If Fed makes their intentions clear this panic will subside and Businesses will know at least the value of Dollar in the near future.

  • Gold Bug says:

    Fall seems to be more due to FIIs longs unwinding. Not short build up. Seems temporary.

  • Anoop says:

    Interesting analysis. Any thoughts on whether historically, volatility or lack of it tends to act as a precursor to significant moves, up or down?