The DOW dropped a huge 1000 points today, later recovering most of the loss. The volatility in the market continues to grow exponentially. What is the driver? Derivatives? More uneasy traders? In any case I think that the headliners everyday in the Journal explaining each days move is a bit over the top.
There are conflicting reports about today's volatility. First it was Greece, then it was a trader error.
http://www.cnbc.com/id/36999483
Did the error ignite investor worries? Was the latest Greece riot the last straw? Who knows! Movements in the market are too often attributed to specific events.
You see this too with traders, especially at the chop shops. Young guys are quick to brag about a strategy or use a profit as support for their "hypothesis". This confirmation bias really gives traders a bad name.
While there are event drivers in the market, daily moves in the market are the result of aggregated movements on individual names. BTW the Greece story was already out there a while ago and didn't get 1000 points worse today, yet headlines were quick to claim "DOW DOWN 1000 on Greece Debt Crisis".
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