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Matt's Market Insights

Amnesia? Bipolar disorder? Schizophrenia?


No, I'm not talking about myself, though some of my colleagues might argue otherwise. I've heard these terms thrown around a lot lately in reference to the market. How can we have consistent, hundred-plus point moves whipsawing back and forth unless this market has lost its mind?


Perhaps the market does have a mental illness. If we look up the DSM-5 (Diagnostic and Statistical Manual of Mental Disorders) criteria for, say, bipolar disorder, we find characteristics such as "inappropriate elation or euphoria," "inappropriate irritability," "grandiose beliefs" and even "increased talking speed or volume." So actually these descriptions don't seem too far off the mark.


But the market doesn't have a mental illness. If anything, active participants within the market may have mental disorders, but the market itself is doing just fine. There's a term for what we're seeing, and its called volatility. I can't stress enough how natural and ordinary ... Log in or subscribe to continue reading.

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