{"id":32793,"date":"2019-08-06T13:47:29","date_gmt":"2019-08-06T18:47:29","guid":{"rendered":"https:\/\/insights.tradestation.com\/?p=32793"},"modified":"2019-08-06T13:47:29","modified_gmt":"2019-08-06T18:47:29","slug":"volatility-struck-market-huge-way-this-week","status":"publish","type":"post","link":"https:\/\/www.tradestation.com\/insights\/2019\/08\/06\/volatility-struck-market-huge-way-this-week\/","title":{"rendered":"Volatility Struck the Market in a Huge Way This Week"},"content":{"rendered":"\n

Just like a storm on a hot summer day, volatility struck the market in the last week.<\/p>\n\n\n\n

Between 1:26 p.m. ET on Thursday and 3:10 p.m. yesterday, the S&P 500 dropped 188 points. That was more than double its range for the entire month of July.<\/p>\n\n\n\n

The selling climaxed on Monday as investors came back from the weekend scared of President Donald Trump’s trade war<\/a> against China. They hammered the index almost 3 percent, its worst one-day drop since early December. <\/p>\n\n\n\n

That session was so bearish that only eight of the S&P’s 500 member stocks managed to rise.<\/p>\n\n\n\n

\"\"
S&P 500 chart with support line and Rate of Change indicator.<\/figcaption><\/figure>\n\n\n\n

It also pushed up the Cboe’s volatility index ($VIX.X) by nearly 7 points. The last time it moved that much in a day was early in October as stocks began their worst quarter since 2011.<\/p>\n\n\n\n

Support Broken amid Summer Doldrums<\/h3>\n\n\n\n

It was almost impossible to predict the move because investors were focused on other big events. The Federal Reserve cut interest rates<\/a> for the first time in over a decade and key economic reports showed jobs growth still humming along. It was also the busiest week of second-quarter earnings season<\/a> as major companies like Apple (AAPL)<\/a> issued results.<\/p>\n\n\n\n

But those stories quickly faded after the Administration slapped tariffs<\/a> on an additional $300 billion of Chinese goods. And it got worse when Beijing seemed to retaliate by letting its currency crash against the dollar.<\/p>\n\n\n\n

Another cause for the volatility spike was the break of a support zone from earlier in the year. Once that gave way, buyers had no clear levels to defend. <\/p>\n\n\n\n

Mastering Volatile Markets<\/h3>\n\n\n\n

Regardless of why the market just crashed, one thing is clear about volatile markets: Companies stop trading on their own fundamentals as emotions take hold. Attention shifts away from individual stocks and toward the big indexes.<\/p>\n\n\n\n

This can be frustrating for investors, until they learn to harness the power of futures<\/a>. The biggest stock indexes — S&P 500, Nasdaq-100 and Dow Jones Industrial Average — have futures. All three set volume records for the on Monday as investors scrambled for shelter in the volatility storm.<\/p>\n\n\n\n

Did you know TradeStation clients can now go to the next level with our new FuturesPlus<\/a> service? You can even buy and sell options on futures. Diversifying your portfolio and hedging against risk has never been easier.<\/p>\n\n\n\n

In conclusion, volatility can hit markets quickly and violently like a thunderstorm on a hot summer day. While there are always risks and no guaranteed path to profit, traders who are ready stand a fighting chance. So even if you missed this volatility spike, with FuturesPlus you can be ready for the next one. <\/p>\n","protected":false},"excerpt":{"rendered":"

Just like a storm on a hot summer day, volatility struck the market in the last week. Between 1:26 p.m. ET on Thursday and 3:10 p.m. yesterday, the S&P 500 dropped 188 points. That was more than double its range for the entire month of July. The selling climaxed on Monday as investors came back […]<\/p>\n","protected":false},"author":39,"featured_media":32796,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[16],"tags":[],"yoast_head":"\nVolatility hits stocks in August as tariff moves spread fear<\/title>\n<meta name=\"description\" content=\"Stocks are experiencing the most volatility this year after President Donald Trump announced tariffs on an additional $300 billion of Chinese goods.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.tradestation.com\/insights\/2019\/08\/06\/volatility-struck-market-huge-way-this-week\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Volatility hits stocks 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