Record Calm Stock Market Gets A Shock

Tyler Durden's picture

Via Dana Lyons' Tumblr,

After a record run of muted movement, will recent volatility send negative shock waves through stock market?

The recent uptick in stock volatility has some investors on edge (OK, it is mostly just financial news editors on edge). The truth is, while volatility over the past week has seen an increase, it is not all that far away from the historical norm. Last Thursday through Monday, for example, the Dow Jones Industrial Average (DJIA) experienced 3 straight “volatile” days, with daily ranges of between 1% and 1.6% on all 3 days. Looking historically, however, we find that the average daily range in the DJIA over the last 90 years is 1.6%. Even during the current bull market since 2009, the average range is 1.08%. Thus, the recent action should hardly be characterized as volatile.

The reason it perhaps seems so tumultuous is because we are emerging from a long stretch of calm in the market – record calm, at that. Prior to Thursday, the DJIA had gone 72 days without experiencing a daily range as wide as 1%. If that sounds like a long stretch, it’s because it is a record. In fact, the record prior to this recent streak was just 49 days in a run that ended in late February of this year. And prior to 2016, the record going back to 1928, according to our database, was a mere 32-day streak back in 1944 – less than half the recent streak.

Furthermore, historically, there have been just 16 streaks that have lasted as long as 21 days, i.e., 1 month.


Interestingly, this recent streak is the first of any of the 16 that saw 3 straight 1% daily ranges immediately following its culmination. So is mean-reversion starting to rear its volatile head here following the record calm? And is there a nefarious message to the sudden uptick in volatility?

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shitshitshit's picture

looks like an asthmatic and anemic bitcoin chart

c'mon, you can do moaaaarrr


MonetaryApostate's picture

Everything will change once everyone realizes they have been printing & loaning hundreds of quadrillions to steal everything...

Fake money, fake debt, fake value, fake news, fake investments, fake markets, fake history, fake everything!

Ghost of PartysOver's picture

Don't forge fake crypto's. It is all one big lie searching for reality. 

Ajax-1's picture

As long as we have fake boobs, it's all good.

buzzsaw99's picture

get gartman on the phone.

Erek's picture

When the stocks and the bonds crash, what will happen with bitcoin?

Nobody For President's picture

Finally, some excellent advice. Mr. G will know what to do.

WillyGroper's picture

FWIW folks...contractor exercises going on in PR setting up command structure for contigious 48. 

gov's will relinquish power to DHS.  the proverbial shit is about to hit the fan.

recommend YT's Roy Potter & Matt Bracken's latest.

InnVestuhrr's picture

I am loving the stock market sell-off cuz my bond portfolio is up almost $85K - keep it going !!!!!

Schmuck Raker's picture

If you only tease in these articles about stocks, I'll stick to Bitcoin.

(THAT is causation.)

wmbz's picture

The DOW will see 35,000 before it sees 15,000. This crap as a long way to go!

LawsofPhysics's picture

Shock?  What shock? All time highs asshats!

"Full Faith and Credit"

Tolomeo's picture

This guy must be joking? Right? What volatility??? The market continues to melt up! Bitcoin up, up & up! Real Estate, guess what? Up! Gold & Volatility are crushed and no longer a factor... They are just toxic assets (unless your short)! This everything bubble it’s just too big to fail! Hot Dam, as I write this, look at the volatility crush and Bitcoin blowing past 16,000!!!