For investors who like action, this summer’s stock market will pack as much as any Will Smith movie while it looks for a turning point.
Unpredictable days like Monday, when the indexes moved from positive to negative at will and with little notice, are likely to become the norm as Wall Street searches for a market bottom and a recovery that could be months down the road.
“We’re getting news every 5 or 10 minutes that seems to change the psychological positions of the traders. That’s what’s really making this market turn,” says Michael Kresh, president of M.D. Kresh Financial Advisors in Islandia, N.Y. “Frightened money is jumping all over the place, and as long as that happens we’re going to get these whipsaw days.”
Market watchers have been probing for signs of a bottom since the market’s rally off its March lows fizzled. But without a significant increase in volatility, a capitulation can’t happen where the market becomes hugely oversold, forms a bottom and then heads upwards.
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