After four historic, horrifying days of at least 400 point moves, the week ended down an insignificant 1.5%. When you try to estimate how many millions of people lost how many billion minutes of sleep over the week, you must remember the post-traumatic impact of 2008. Investors looked death in the eye three years ago and still remain terrified. In the end, did it really matter?
Next week is likely to be volatile as well. The VIX is still a relatively high 36. Uncertainty over the downgrade has decreased while uncertainty over Europe has increased. The meeting between German and France chiefs of state on Tuesday could easily be market moving. Anticipation of Bernanke’s speech on the 26th will also start building.
Para-phrasing Warren Buffett, I don’t know where the market will be tomorrow, but I do know where it will be in 5 years . . . UP!