13 September, 2016

 Well, it seems that volatility has returned -- big time -- to at least some of the markets over the past two trading sessions, with Friday’s substantial equity sell-off turning into a an upside reversal of almost equivalent scale. In this regard, although the Dow did not fully make up the 400-point loss it sustained on Friday, it did recoup about 240 points of the decline. Moreover, about 7.8 billion shares changed hands, well above the 6.3 billion daily average for the past 20 trading days. Volatility readings also spiked. On a valuation basis, the S&P 500 is trading nearly 17 times expected earnings, well above the 10-year average of 14. One analyst summed up the equity market’s relative resilience in the face of high valuations by saying: “It’s like high blood pressure: You’re probably going to have a heart attack some day, but it doesn’t mean it’s going to happen anytime soon.”