| Wednesday, July 24th, 2013 | | | | | |
 | | | | Trending Past Turmoil | | | - The end of "all or nothing" days?
- Breaking down bear market volatility
- Plus: More gold guesses…
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| | | Greg Guenthner coming to you from Baltimore, MD...
 | | Greg Guenthner | The stock market has been light on drama lately.
So far this month, the broad market has resumed its attack of new highs, stomping the VIX back toward its lows. In fact, yesterday's measly drop was just the third time this month that the S&P 500 failed to finish the day in the green.
"After experiencing big swings in the market from late May through late June, volatility has quickly come back down to earth this month," explain the team over at Bespoke Investment Group. "Not only has the VIX moved back down to its lows for the year, but the pace of 'all or nothing' days has quickly dried up."
Bespoke records an "all or nothing" day when the net daily advance decline reading on the S&P 500 is greater than plus or minus 400. In other words, an "all or nothing" day happens when a massive number of stocks on the market are shooting higher together— or when a large majority of stocks are moving lower.
Aside from a few "all or nothing" days popping up in May and June, 2013 has been an uneventful year. In fact, if it keeps up this pace this year, we'll see the lowest total "all or nothing days" since 2006.
That's a good thing for long-term investors. Notice how market turmoil intensified the number of "all or nothing" swings over the past seven years. Not surprisingly, the two highest totals since 1990 came in 2008 and 2011 when the financial crisis and eurozone meltdown ripped through the markets. These periods of uncertainty produced ultra-high correlations in the market. It's not healthy action. Now, it appears that we're moving away from the turmoil…
Fewer and fewer big, correlated stock market moves will inspire investor confidence. A choppy, confusing market keeps most risk-adverse long-term investors on the sidelines. But if stability surfaces, more investors will leave their bear market mindsets behind and take the plunge.
| | |  | | | | Rude Numbers | Targets, Predictions and Wild Guesses
| | | | 6.2 million | Spaniards are unemployed. That means that one out of every three unemployed in Europe happens to hail from Spain. The country's unemployment rate is expected to hit 28% next year. | | 22 points | were added to the Dow yesterday. If the index finishes off the month in the green, it will have spent 18 months out of the last 2 years in positive territory. | | $59 | buys you one share of Herbalife stock. Despite activist investor Bill Ackman's best efforts, the company is now up more than 80% this year, having rocketed 32% in just the last month. | | 3,000 | salaried positions will be filled at Ford Motors this year – 800 more than expected. Ford's expansion comes as U.S. new-vehicle sales have increased for 25 consecutive months. | | 3 | days in the red are all the S&P can muster on the downside so far this month. Yesterday's three-point drop halted the broad market's four day winning streak… | | | | | | | | Rude Trends | When to Buy... When to Sell
| | | After a little consolidation, gold is at it again today. The spot price jumped $8 this morning to $1,343. Of course, this means my mailbox is filling up with gold questions.
Time to clean house…
"I seem to recall that there was a $1,300 dollar line in the sand you wrote about several weeks ago," writes a curious reader. "If gold broached that, there would be a continued upswing. From today's article, it appears you are backing off that. What gives?"
Nothing gives. We got the oversold bounce, didn't we?
I never wrote anything about a "continued upswing" in gold. Those are your words. I told you we could see a sharp move that had the potential to last for a few weeks.
From here, we have to see if gold can but through additional resistance. I think it could have trouble at $1,350 or $1,400.
Moving on…
"Sounds like you are on the fence," writes another anxious reader. "Do you now believe gold could have bottomed? Can we still 'book it' gold $1000-1100 or is this another case of where you were dead wrong?"
No fence-sitting here. I liked gold (and miners) long for a trade at the $1,300 breakout. Nothing wrong with playing it both ways— that's how you make money in the markets.
At this point, I don't think investors should be piling into gold. I still think we see lower prices before the end of the year (sticking with my $1,000-1,100 landing zone). When all is said and done, I don't really care about hitting my guess on the nose. I'd rather help you make the right moves and bank some gains along the way…
[Ed. Note: Send your feedback here: rude@agorafinancial.com - and follow me on Twitter: @GregGuenthner]
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