The Week Ahead: Another Ride on the Rollercoaster?

Next week should prove quieter, but with all the uncertainty weighing on the markets, it's probably best to get defensive and wait for possible buying opportunities later on, writes MoneyShow.com senior editor Tom Aspray. Traders in the past have complained about the lack of price movement in the summer, as it means that there are fewer decent price swings to trade, therefore fewer opportunities. a&f casual swearters This had started to change over the past few years…but should never be heard after last week's wholesale handbags action. There were so many factors that buffeted the market, in addition to the downgrade by S&P and the FOMC announcement, that it was tough even for seasoned professionals to keep up. Click to Enlarge This chart is not my electrocardiogram, but a 5-minute chart of the trading activity in the September Emini S&P futures last week. For those who are not familiar with this futures contract, each point move is equal to 50, so a 40-point move is worth 2,000 on margin of roughly 3,500. I share this just to illustrate that there were several times last week where if you bought or sold at the wrong time, you could have lost as much as your margin before the day was over. The most dramatic swing was in reaction to the Fed's announcements. sport accessories Futures rallied initially on the prospects of lower rates until 2013, but then plunged below 1,100 when they realized the Fed's pessimistic view of the economy. Of course, futures quickly recovered, and closed the day sharply higher. The stock market's sharp drop over the past few weeks seems due to the opinion of many that that the US economy will get even weaker, and that another recession is now more likely. Related Posts: Plummeting DeVry Leads Education Sector Down. Bridgepoint, Apollo, and APEI Buck Trend. Three Beaten-Down Banks Poised To O'Neills – Team Jerseys Drop Even Lower