Volatility return to stock market

August 29, 2007

After the yesterday’s sharp correction on NASDAQ and Dow Jones stock market due to growing concerns of credit markets deficiency, which will mostly hurt the financial sectors along with lack of consumer confidence and falling home prices to some extent suggest growing concerns of slowdown in US economy.

Looking at the sharp fall on Tuesday, it clearly seems the volatility has return to Wall Street again along with all the major stock markets of world. Taking clue from yesterday’s fall from Dow Jones and Nasdaq, Asian market opened in red and recovered in late afternoon with news of rising weakness in yen versus dollar/euro giving a strong hand to stabilize the stock market, which significantly help the European market to open in green. No doubt this will help the US stock market to stabilizer around 13000 points and again some 100 to 300 bounce back rally clearly seems to be evident in coming days.

At this situation I would like to take caution approach and would like to do stock investing in selected stocks pick on a very short term basis until the next trigger, possibly the Fed’s next move, hits the market giving a confirm clue to stock market direction.