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Intraday Volatility Escalating

07-21-2020

Today saw a good deal of motion right off the bat, as the stock market initially surged higher. However, there was some selling almost immediately and the indices went their separate ways, with the Nasdaq giving up an early gain to lose 0.5% while the Dow was ahead by 1% and the S&P 0.5%.

From Moving the Jell-O to Shuffling It I point this out because it seems like we're been seeing a little more sorting out during some of these recent sessions. It hasn't really meant anything so far, but it is just a little bit different, and whether it means anything in the longer term remains to be seen.

After the first rally and flush, the market rallied again, but in the last hour it headed south rapidly, led by the Nasdaq, which lost about 1%.

Away from stocks, green paper was a bunch weaker, fixed income, was a little firmer, particularly at the long end, and the metals roared to life, led by silver, which tacked on more than 5% and for the first time in ages has demonstrated what its true personality is, i.e., that it can be extremely wild. If it ever gets the bit in its teeth and attracts the attention of the retail crowd on top of institutional interest, it could literally trade almost anywhere. Gold was higher as well, gaining more than 1%.

At Breakneck Speed Both metals saw large gains right off the bat before they chopped around some. While that action around didn't mean much to the metals themselves, it did see the miners fluctuate rather wildly. To cite one example, Agnico Eagle opened almost $2 higher and within an hour was almost a dollar lower before it bounced to gain a buck again only to close just 27 cents higher. A lot of the other miners saw similar sorts of surges back and forth. Not that it makes much difference, but it does illuminate how volatile they're becoming, and I expect that will only intensify. If you look too closely at the screen, you're going to get whiplash.

Positions in stocks mentioned: long AEM.