We find ourselves talking about the performance of the popular equity indexes far more than we typically do. We do this because in fast markets like we are in now, the performance of the asset class overwhelms the performance of the individual stock action. It is important to realize that the 340 points / 12.8% selloff we just experienced over a 10-day period is a 10-standard deviation event. Statistically speaking, such an event is quite rare and very surprising given the fact that the economy is growing nicely and expected to continue to do so.
The vicious 215 (8.5%) bounce off the 2,533 low was almost as rare, but given the preceding selloff, somewhat normal. With the market getting and remaining emotional, we thought we would start the week with our expectation of what is next.
