Eeek it's irrational. No, it's irrational only if you just look at the past to gauge future results (a major no no). This market has no past because we are in uncharted waters. The TV talking butts do not know what they are talking about when it comes to reasons for this or that. There is only one reason for now: margin calls on people so rich they never had any. Monster calls by huge hedge funds. Understand that anyone buying into a hedge fund had to be an accredited investor (income 500K, liquid net worth one million. Many funds demanded higher minimums.) which automatically means hedge funds were casinos for the really really rich.

Normally a margin call on a stock doesn't have to be met for a week, even longer for certain clients. Commodities has always been three days because the leverage there has always been fifty to one or higher. But for stocks right now a margin call for a million dollars has to be met in three hours. Period. Rich guys ain't so rich that they can come up with that kind of cash right away so their positions are liquidated (sold). This monster selling collapses the market....for a while, then unhedged buyers come in sending the market higher. Lots of us with a futures background adore volatility because we know how to trade it and make money.....only right now the markets are what we call "fast," a term meaning that only market orders will be honored. All orders are market orders. This freezes out the normal volatility trader and the market goes nuts. You can plot this fairly well if you consider this a trading "range," one that ranges lower and lower each week (day hour). What is usual is that as volatility (range) becomes less and less technical analysis tells us that the market will break out (either up or down). Eventually these hedge fund margin calls and liquidations will die down and then (unless we get Obama, and don't think everyone isn't talking about him and his "redistribution of wealth") we will have a tradable market.

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