(By David D. Moenning) Good Morning. After four months of watching the bulls march merrily higher on a daily basis, with nary a single bout of volatility along the way, suddenly we're back to what is beginning to feel like the bad old days of 2011. A market that had no memory from one day to the next. A market that gave the word volatility new meaning. And a market where investors were forced to watch any and all headlines from countries they'd only visited (or dreamed of visiting) on vacation as well as securities they'd never heard of before. (Come on, admit it; did you really watch European debt spreads against the bund before last summer?)
Yep, that's right; it appears that the good old days of watching Apple (AAPL) defy logic as well as gravity might be ending. And in case you don't spend at least a moment or two of each and every day checking in on all things Apple, the world's biggest company appeared to be almost human on Friday. AAPL shares sank nearly 3% and are now within six bucks or so of breaking into a downtrend - the horror! And after the way Google (GOOG) traded Friday after its earnings report, tech may be a problem if it doesn't perk up soon.
And then there are the banks. Don't look now, but all of that Q1 good cheer appears to be fading fast as the KBE (SPDR bank index) got smoked on Friday. Perhaps it was the earnings from Wells Fargo (WFC) or maybe somebody didn't like Jamie Dimon's numbers over at JPM, but if the XLF sees another day like Friday, we could be back to misery in the financial sector right quick.
Whenever the character of the markets shifts - and especially when that shift is sudden - it makes lots of folks scratch their heads. For unless you know that constant change is simply part of the game, you may be frustrated by the realization that the strategy that had been printing money for you (can you say "buy the dips" - all the dips?) is suddenly not working.
While I am willing to hold out the idea that the dip buyers may return to the game just as quickly as they abandoned it over the last two weeks, it appears to me that the character of this market has indeed shifted. The reason behind the quick rule change in the game appears to be the idea that investors are now anything but certain of the themes that had been driving the markets steadily higher from late-December through the beginning of April.