Just as we saw risk markets surge the week of October 21 while the Yen soared. Today we have “risk off” across the board as the BOJ intervened for the third time this year to knock the Yen lower. The US dollar and bonds are up more than 1% so far today as the algo trades trigger their mindless trail of US dollar up, risk assets off.
Last Thursday’s 3% rally in the Dow was the 5th of that magnitude since July 22, and moreover, there have been only two sessions since then when the Dow has not swung triple digit moves in the course of each trading day. Some important big picture on this type of volatility comes courtesy of by David Rosenberg this morning:
“Remember that we had no fewer than 19 of these sessions (3% up-days or more) from the time Lehman Brothers collapsed in September 2008 to the final low in March 2009, and of course, during that time there was also a plethora of plans to save the US banks. Even with all those massive rally sessions, the market still managed to slide 50%.”