The final hour sellers are at it again. Though major indexes opened the day broadly higher around 1%, it was the final hour of trading that did the bulls in today as the S&P 500 (^GSPC) and the Dow Jones (^DJI) both fell over 1% in the final 38 minutes of trading.
This has happened repeatedly enough since the correction began on August 24th that one could conceivably open short positions one hour from the close and cover them in the final two minutes for a pretty reliable profit. The Volatility Index (^VIX) fed on the action quite hungrily, down 11% at the open but up over 6% by the close.
The mirror image of equities today were bonds, which began the day broadly lower with higher yields, and ended the day substantially higher as safety seekers poured into treasuries as the day drew to a close.
The volatility stretched globally today as Asian markets experiences some of the wildest days since the 2008 financial crisis. Japan’s Nikkei (^N225) saw dizzying gains of 7.7%, the most since October 2008. That month also happened to see double digit percentage falls, so Japan’s markets are clearly not out of the woods.
Chinese equities had a modest day higher with 2.3% gains, though modest only within the context of the last few months. In any other time, 2.3% gains would be considered extremely high, though now it actually seems lackluster and unconvincing.
As headlines trade tones back and forth as to whether the Federal Reserve will actually raise rates next week, daily action in the markets seems to reflect the collective guessing game as to what the Board will do behind closed doors. We all await the plumes of white smoke from the chimney of the Mariner Eccles building as the board of monetary Cardinals picks their new interest rate leader.
Until that point, the volatility is likely to continue unabated.