Reality Check: The high in the Dow futures was 17980 posted just 7 trading days ago… 7 DAYS! With the Dow at 18,000 the percentage moves are what matters—- NOT the Flat Number Change. I get so sick of the TV anchors playing up any thing less than 5% moves in the value of the Index. Anything less than that is just noise. The problem is 5% of 18000 is 900 points. That is just too much for these folks to wrap their heads around, i guess. Its’ 3rd grade math, but they consistently would rather talk about the number of points without providing any context as to the relative percentage points…. Back in 2009 at the panic low, the Dow was at 6500. A 5 percent move at 6500 would be 325 points. Definitely worth talking about. However, now that the index has almost tripled in value, 325 points is just a gnat farting in the wind. 900 points even is just 5 %…. And to have a 5 % correction on the day the Ruble meltds down is really not that unexpected, especially since we just poted RECORD ALL TIME HIGHS just 7 Trading days ago! For Pete’s sake, how about some perspective, instead of just selling fear? Moving to the S&P. The record all time high of 2079 was posted on December 12th—- 7 days ago. Today’s low at 1968 represented a 5.2% correction from that high. AGain, 111` handles seems like a huge catastrophe until you consider the percentage move as opposed to just the number. So there you have it.. a 942 point move in the Dow over 7 days. A 111 point move in the S&P over the same 7 days. Throw in the technical analysis that these lows were within stones throws of the 38% retracement of the recent rally from the October lows: and you have another technical reason for the moves in these indexes. Nary a word from anyone on cable. Instead, just an eerie disbelief and general palor of fear. I guess that is more appealing to their audience, as opposed to trying to put perspective on such volatility. I realize that this is a never ending conundrum. Big number moves can be scary. Fear keeps eyes on the tube. Eyes on the tube raises ratings. Higher ratings allows the company to sell more boner pills and HGH/testosterone pills, and it allow them to charge more for those 30 second ads. I get it. I just wish they would have a 5 minute window every day where they had perspective. Put up the charts below. It might help their audience actually “get” something about markets, instead of looking at the market like a giant unintelligible scrum.
