Just took a quick peak at the Dow this afternoon -- from a high of more than 100 points above opening this morning it's now down 177.77 points from the opener. That's a spread of nearly 300 points in just over four hours. Can Andy, or someone else here with more inside knowledge of the market meanderings than I have, speak to my perception that the market is far more erratic since the New Year than I remember it as being last year? The intraday spikes and valleys seem much higher (and lower) than in the past. Am I just noticing something that has always occurred or is there more here than meets the eye?

-- Cash (cash@andcarry.com), January 24, 2000

Answers

There is a trend called the "Smart Money Index" that postulates that "stupid" day treaders are active during the opening hour of the market and "smart" big money types are active just prior to close.

What I believe you are seeing is a transfer of assets paper stock certificates to the fools and real money to the profit takers.

-- Bill P (porterwn@one.net), January 24, 2000.

I think part of it is caused by the new mix of stocks in the DJIA. Some older members of the exchange that didn't move much one way or the other with stocks such as Microsoft that can move quite a bit in a day. Some analysts warned that the new Industrial list would be more volatile, with bigger up jumps and down jumps. I am not predicting a crash OR the market going up forever, but the age-old investing principles still apply I think. Buy, hold, and forget day-to-day moves.

-- liu (lookitup@dictionary.com), January 24, 2000.

This is the usual sequence of events that occurs after the "moment of truth" for a market has passed. We are now in what the industry calls the "Twilight Hour"of which extreme volitility is the hallmark.

-- James (brkthru@cableone.net), January 24, 2000.

When the DOW was at 1,000 a 1% drop was 10 points. When the DOW was at 5,000 a 1% drop would have been 50 pts. When the DOW is at 11,000 a 1% drop is 110 pts. Price movements are relative.

-- slza (slzattas@erols.com), January 24, 2000.

Movement is relative,volatility is not.

-- James (brkthru@cableone.net), January 24, 2000.

1) The market is overvalued...most analysts agree about this.

2) The recent petroleum market fluctuations cause problems for shippers, airlines, and consumers in the northeast. All of which tend to make stock prices/values decline in some segments (DOW Transports, for example.)

3) The Fed is sopping up liquidity.

4) The only question is, who is buying? And why?

-- Mad Monk (madmonk@hawaiian.net), January 24, 2000.

the age-old investing principles still apply I think. Buy, hold, and forget day-to-day moves.

Sure, works every time. Course if you bought in the fall of 1929 and forgot the day-to-day moves you got back to break even point around 1945. Some of us are too old to wait that long.

Actually volatility is considered to be one of the signs of a change in market direction.

-- (4@5.6), January 24, 2000.

MM Buying is occurring in a very narrow sector ,look at the advance/decline line.

-- James (brkthru@cableone.net), January 24, 2000.

Trader Talk(CNBC):

"Get used to volatility"

"Downside tomorrow"

-- Kyle (fordtbonly@aol.com), January 24, 2000.

It's called distribution. "smart money" dumping stocks on last in line suckers.

-- Squid (ItsDark@down.here), January 24, 2000.

Squid:

YES! That describes a markets "twilight hour " exactly.

-- James (brkthru@cableone.net), January 24, 2000.