S&P 500: -$378B today, +$223B Monday, -$333B Thursday,... $3.1T off Oct,'07 high

The index declined 3.41% (preliminary), losing $378B in market value, and suffering its worst day since Feb 27, 2007, when it declined 3.47% (-3.52% on 3/24/03, -4.15% on 9/2/02). The index is now $3.1 Trillion lighter than it was on October 9, 2007. While the VIX remains more than halfway down from it’s January 37.6 high and 17.8 June low at 25.2, the YTD volatility as measured by daily moves of at least 1% in either direction is the 11th most volatile period since 1928 (YTD vs. full year) . While the early year was nerve-racking with all those worst starts since well before any of us (OK, most) were born, the volatility level declined and then started to pick-up again in those fun-filled summer days of June-July (-9.50% for the S&P 500). Earnings season begins soon, and with the Q4 updates will come the traditional forward year (2009) downward EPS adjustments. I expect the volatility to pick-up with EPS surprises and expectations change quickly.

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