Grant, that by this unsparing hurricane
Green leaves with yellow mixed are torn away,
And goodly fruitage with the mother spray;
'Twere madness--wished we, therefore, to detain,
With hands stretched forth in mollified disdain,
The "trumpery" that ascends in bare display--
Bulls, pardons, relics, cowls black, white, and grey--
Upwhirled, and flying o'er the ethereal plain
Fast bound for Limbo Lake. And yet not choice
But habit rules the unreflecting herd,
And airy bonds are hardest to disown;
Hence, with the spiritual sovereignty transferred
Unto itself, the Crown assumes a voice
Of reckless mastery, hitherto unknown.
-Reflections by William Wordsworth
The market was humming along on a few tidbits of good news and with a sense that enough carnage had occurred for at least one day of reprieve. Then the habit of angst kicked in as with just about every session within the last few weeks. First, the rally stalled and lost a chunk, much like the tip of an ice cream mound in the hands of parched children who had just stampeded a Good Humor truck. Okay, so the market reached an intraday top, as some people were leaving early for religious observance. No big deal-right?
Moments later, another chunk was missing. This was followed by the precipitous slide, led by those high-flying tech names that cannot seem to catch a break. The NASDAQ was up 40 points, then 30, and up by only 10 points; by then we all knew where it was going; up by three points, seesawing back and forth then, BAM! The NASDAQ tumbled into the red, down for the day, despite strong numbers from a big bang due to several brokerage upgrades of new bellwether names, and a retail sales report that spoke to a resilient shopper, as well as a stronger economy.
The market was coming down the stretch and the 3PM sell-off was in full stride.
Why was this happening? The only explanation I could find was habit. Call it muscle memory. Habits ruled this all-too-reflecting herd, and spooked them into a hasty retreat. However, the sell-off came too soon, and there was actually time for clearer heads to see that this sell-off was completely unwarranted. That selling, simply begat selling, and each tick lower felt like a perilous plunge. When the market is on autopilot on the way up everything is groovy, but on the way down it's a pressure cooker that gets to even the best of them.