By Gary Antonacci
The stock market has been on a Mr. Toad’s wild ride lately. The S&P 500 was down 5.3% early last week, but finished the week up 1%. For the month, the S&P 500 was down 6.3%, its worst month in three years. Last month was also the most volatile one of the past four years. News sources blamed the volatile fall in stock prices on the economic slowdown in China. But that was actually old news, and China’s influence on our economy is actually minor.
What really was happening is that investors were looking for a reason to sell stocks after six years of gains. The consolidation in recent months was also trying their patience. Herd mentality then took over, and brought about panic selling. A few prominent technical indicators, like penetration of the 200-day moving average, then caused technical traders to bail on the market. One of the ... Log in or subscribe to continue reading.