Yesterday, the US Equity markets took a spill. It was the first selloff of any importance in a few weeks. Every selloff of since mid-August has been met with more buying, This is one of the reasons that realized and implied volatility as measured by the VIX continues to hover around historically low levels. Long-time students of the market know there is an old adage that "the market makes the news." It another way of saying "tell me what the market did and then I can tell you why." This is another way of saying market commentators "rationalize" market movements. Have you ever noticed that after the market fell a news anchor or market commentator will say, "the market fell today because interest rates rose because of the threat inflation."? Then a few days later the same commentator will say "the market rose today as interest rates rose because the economy is getting stronger." If you are going to get anywhere, you must be consistent. It is also important, to be honest with yourself. Often times, we do not know why the market does what it does on a particular day, and that is ok. What we should concern our selves with is the trend. It is continuing or is it turning.
