Market Volatility - Downward Indication?

The market has been quite volatile. Last week the Dow fell 585 points or 4.23%. 208 points of the decline came on Friday, 7/27/07, with 140 points coming in the last half hour.

Yesterday' s market was quite a ride also. The Dow crossed from from positive to negative or vice versa six times. Here are the approximate highs and lows of swings during the day:

9:37 + 61

9:49 - 52

10:20 + 75

11:00 - 76

12:35 + 96

1:06 - 2:42 Flat

3:26 - 67

3:56 +180

4:00 +150

What makes me concerned is that in spite of the 150 point gain, the new high and new low numbers were extremely bearish. For the NYSE, new highs were 32, while new lows were 499. These number show me that the stocks gaining are very narrow, with broader market still declining. Also, the VIX closed at the highest level since 2003. The VIX measures the market's expectation of volatility and is sometimes called the "fear index."

If the market continues downward or the ratio of new highs to new lows doesn't exceed one, then I will likely close out my modified Unemotional Investor Growth portfolio.

This is not financial advice. Please consult a professional advisor.

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