Each day in the stock market has become 'all or nothing'
Every day in the stock market has started to become "all or nothing": either everything is good or everything is bad.
On Tuesday, stocks surged higher, rising more than 2% across the board with the Dow having its second-best day of the year gaining 390 points. The previous trading day - Friday, September 4 - stocks got slammed, with the Dow falling 270 points as markets capped one of their worst weeks in the last few years.
And so while so much of what's been written about the stock market has made a gesture towards the "extreme volatility" we've seen in markets, this is the real thing: markets are either all good or all bad.
In recent notes to clients, analysts at Bespoke have defined an "all or nothing" day as a day where more than 400 of the S&P 500's 500 members either fall or rise. With 80% of the index moving the same direction, the fortunes for many investors are either all good or all bad.
On Tuesday, Bespoke wrote that through the end of last week, 9 of the previous 12 trading days had been "all or nothing" trading days, the kind of volatility only matched during the financial crisis in 2008 and the last stock market correction seen during the fall of 2011.
Looking more granularly at each trading day, Bespoke found that over the last few weeks, the final hour has largely seen a crescendo of activity in step with the day's trend: either a huge rush of buying on up days or a huge bout of selling on down days.
As we see in these charts from Bespoke, the final hour is an exaggeration of the day itself.
And so as long as uncertainty - be it about the Federal Reserve, about China, about the structure of the market itself - continues to play a leading role in the day in, day out behavior of the stock market, it seems like markets will continue to tell you to be one of two things: in or out.