{"id":12056,"date":"2015-09-09T18:45:56","date_gmt":"2015-09-09T23:45:56","guid":{"rendered":"http:\/\/olduvai.ca\/?p=12056"},"modified":"2015-09-09T18:45:56","modified_gmt":"2015-09-09T23:45:56","slug":"it-wasnt-a-crash-but-it-could-become-one","status":"publish","type":"post","link":"https:\/\/olduvai.ca\/?p=12056","title":{"rendered":"It Wasn\u2019t a Crash \u2013 But it Could Become One"},"content":{"rendered":"

It Wasn\u2019t a Crash \u2013 But it Could Become One<\/a><\/h3>\n

A Reminder by John Hussman<\/strong><\/p>\n

In light of the Nikkei Index soaring by more than 1,300 points (!) overnight \u2013 a single day gain of 7.7% \u2013 it is time to briefly review the current market situation. As to the Nikkei, we would note two things: 1. it was \u201ccatching up\u201d to what other markets have been doing, after having been the only stock market index that was significantly down the previous day (whereas all other markets soared after the close of trading in Japan) and 2. such enormous volatility \u2013 regardless of its direction \u2013 is usually\u00a0not\u00a0<\/em>a bullish sign. Quite the contrary, in fact.<\/p>\n

\"brokenlinkchain\"<\/p>\n

\"Nikkei,<\/a>The Nikkei jumps by 1,343 points overnight \u2013 click to enlarge.<\/p>\n

In his\u00a0weekly market comment<\/a>, John Hussman tries to defuse the hysteria surrounding the recent market break a bit, by reminding everybody that a 10% correction is not a \u201ccrash\u201d, but actually a quite normal occurrence. The only reason why it\u00a0felt<\/em>\u00a0abnormal was that there hasn\u2019t been any market volatility for such a long time.\u00a0It is this long absence of market volatility that was abnormal, not the 10% decline<\/em>. He writes:<\/p>\n

\u201cThe market decline of recent weeks was not a crash. It was merely an air-pocket. It was probably just a start. Such air pockets are typical when overvalued, overbought, overbullish conditions are joined by deterioration in market internals, as we\u2019ve observed in recent months. They are the downside of the \u201cunpleasant skew\u201d that typically results from that combination \u2013 a series of small but persistent marginal new highs, followed by an abrupt vertical decline that erases weeks or months of gains within a handful of sessions (see\u00a0Air Pockets, Free-Falls, and Crashes<\/a>).<\/p><\/blockquote>\n

…click on the above link to read the rest of the article…<\/p>\n

 <\/p>\n","protected":false},"excerpt":{"rendered":"

It Wasn\u2019t a Crash \u2013 But it Could Become One A Reminder by John Hussman In light of the Nikkei Index soaring by more than 1,300 points (!) overnight \u2013 a single day gain of 7.7% \u2013 it is time to briefly review the current market situation. As to the Nikkei, we would note two […]<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[2],"tags":[5728,452,7619,501,4427,572,6170],"class_list":["post-12056","post","type-post","status-publish","format-standard","hentry","category-economics","tag-acting-man","tag-japan","tag-john-hussman","tag-market-crash","tag-market-volatility","tag-nikkei","tag-pater-tenebrarum"],"_links":{"self":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12056","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=12056"}],"version-history":[{"count":1,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12056\/revisions"}],"predecessor-version":[{"id":12057,"href":"https:\/\/olduvai.ca\/index.php?rest_route=\/wp\/v2\/posts\/12056\/revisions\/12057"}],"wp:attachment":[{"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=12056"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=12056"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/olduvai.ca\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=12056"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}