One of the indices that I use in my trading systems is the Small Ords. The top red line is a one week Rate of Change line.
Drops greater than 3% in a week have occured every year for the last 3 years. Prior to 2005 we had a dream run from 2002 to 2005 without any one week dropping more than 3%. Even 2002 (not a good year) did not have a week with a 3% drop. Before 2002 3% drops were fairly common.
So, to put the recent market weakness in perspective, it's business as usual for the markets. I can't see any black swans yet!
We have had it so good since 2003 so it's nice to see how our systems perform when the markets turn south.
stevo
