Chart: Risk-on / risk-off investor behavior; Bloomberg BRIEF
Thursday's Bloomberg BRIEF describes the recent bipolar investors behavior dubbed "risk-on / risk-off".
Such behavior seems connected with the investors' uncertainty about the prospects of the economy. While many still believe in the recovery, similar number worry about a possible "double-dip".
And the prolonging crisis in Europe does not help...
As a result the distribution of the daily changes of the S&P500 index for the previous 20 sessions seems to resemble the investors assessment of the economy:
Chart: distribution of daily S&P500 changes, 20 days through 2011-09-29
Pretty unusual distribution (BTW: kurtosis of -1.2587 is characteristic to Wigner semicircle distribution) in connection with high volatility makes the market difficult for trend-oriented investors.
But the market won't stay range-bound forever, will it?