And the Dow gains 274 points for no apparent reason. None. All the news was dismal today, and the markets gained nearly 3% just for the hell of it. This is actually worse than the market falling 274 points, because at least that would have made sense.
You know how if you're in a boat, and you keep pushing on one side, the boat will wobble but it won't capsize, right? But if you rock the boat back and forth repeatedly, the thing's going to eventually flip? Yeah, we're at the "rocking back and forth" part of the chaotic systemic variation right before the stock market goes BOOM, just like back in August 2008 when the market was all over the damn place.
The measure of that rocking back and forth, the VIX volatility index, has been floating around between 25 and 45 for the last two months. This is bad, that much wobble in a system is going to eventually put cracks in the wheels. When the volatility measure has that much volatility in it, that's...not good. We're now getting into the point where chaos controls the market and not traders.
Buckle up, kids. Second half 2010 is going to be a mite bumpy.
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