Another reason for volatility, says Pittsburgh investor Andre Weisbrod, CEO of STAAR Financial Advisors, is the stocks of many companies are screaming, “Buy Me,” because their valuations have sunk so low but their balance sheets and earnings prospects appear good.
On Thursday CNBC reported that company executives had increased their purchases of their own companies’ stocks. This is sometimes considered a sign they recognize a good bargain.
But, at the same time, traders looking at charts of the stocks are nervous about buying them. “If you are a technical guy you are looking for signs the market is bottoming here,” says Mr. Weisbrod.
“The markets are trading more on psychology,” says Ms. Rasiel, director of Duke’s Financial Education Partnership. “People are scared by what is happening.”
One measure of volatility is the VIX, a futures exchange index, sometimes called “the fear index.” During normal times, it trades at around 20. Recently, it has soared to over 48.