The volatility of certain sectors demonstrated yesterday — particularly semiconductors and memory — is growing extreme and (to be honest) I am not sure what it portends for the near or intermediate term.
I do know when Micron ($MU) trades down to $858 and closes at $931 (+$17 on the day) and Sandisk ($SNDK) trades down to $1,276 and closes at $1,391 (-$12) such wide intraday swings render trading difficult to impossible.
This extreme intraday volatility has become routine in a market that now more resembles a casino than a capital market.
As would be said on “American Bandstand” — I give it a 78 I am not sure of the beat but it’s hard to dance to.
This sort of extreme volatility likely indicates a lot of uncertainty and depending on your risk appetite and profile, most should pass on trading these stocks. And if you are trading the QQQs one might reconsider VAR (“value at risk’) and reducing the size of your trading (and investing) positions.
Doug Kass is a world-renowned hedge fund manager with decades of experience and success navigating through some of the most turbulent periods in market history. He is known for his time-tested analytical skills and ability to look past the current noise and herd mentality.
On TheStreet Pro, Kass provides frequent market commentary and investing ideas for active investors throughout each trading day in Doug’s Daily Diary. He also serves as president of Seabreeze Partners Management Inc. Previously, he served as a senior manager at Omega Advisors, a $6 billion investment partnership. He co-authored a book with Ralph Nader and the Center for the Study of Responsive Law called “Citibank: The Ralph Nader Report” and can be found as a guest host on CNBC's "Squawk Box."
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