First, Fridays are traditionally more volatile than other days, as traders decide whether to remain in cash over the weekend.  If dramatic news should break over the weekend (think Greece), they are more likely to sell stocks and hold cash.

In addition, today is a quadruple witching Friday, which is one of those few days when both options and futures expire simultaneously.  Anything can happen on such days . . . or nothing at all.

Lastly, Modern Portfolio Theory is the standard religion on Wall Street.  Originally developed by Harry Markowitz, who won a Nobel prize for this theory of mathematics, it concludes that investors can increase returns, while decreasing risk (which is the Holy Grail), by holding many different asset classes.  The mathematical reason for this is that different asset classes move in different directions or amounts at the same time.  In other words, your portfolio has greater diversification when assets are not correlated too much.

However, in times of financial stress, we’ve found all asset classes move alike.  In other words, the investor looses the benefits of diversification when he needs it the most.

We’re seeing correlations increase right now, which skews most all other market technicals.  The market is driven by headlines out of Europe right now, not economics out of America.  So, whatever happens today, don’t be one of those people who try to analyze it too much . . . like me!