Jeremiah (his name is the root for our word jeremiad) wrote about the children of Israel, “They dress the wound of my people as though it were not serious. ‘Peace, peace,’ they say, when there is no peace.” (Jeremiah 6:14 New International Version (NIV) Copyright © 1973, 1978, 1984 by International Bible Society).

You may not agree with biblical theology; you may find it harder to resist the constant threat of warring factions on this orbital globe. Peaceful dialogue between Democrats and Republicans is as difficult as trusting dialogue between Arabs and Israelis.

As long as people live, equity and bond markets will suffer the effects of hegemonic and internecine conflicts. Investors must endure the conflicts with hopes of resolution. War effects market moves; strategy is every investor’s expectation. Peace is what we all seek with hopeful prayers.

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Sometimes it is best to hold your investing dollars in a money market account until the market provides clear indications of a bull or bear trend. Current market intra-day swings, as an example, when the market is up over 100 points and closes down 80, recommend staying on the sidelines. Entering the market late is better than entering too early, in my opinion.

This does not mean you should attempt timing the market. Guessing when markets have hit the bottom of a trading range challenges seasoned traders. Trends must be identified. Heed the adage, “Don’t fight the tape.” Long-term trends within an asset allocation model work. They work when managers are monitored, asset classes do not trade in the same pattern (negative cross-correlation rather than perfect cross-correlation), and long-term goals are kept in mind.

However, when adding money to an account, it is often wise to wait for the volatility to end unless making smaller monthly contributions to your retirement account. Since you are adding contributions to your retirement account over successive pay periods, you are using a dollar-cost-averaging method. One could say the same for larger contributions, I prefer waiting for the volatility to end. Further, when contributing to your retirement account, you must inform the custodian of your choices. Some plans limit the number of times per year that you may change your allocation.

If you are an option trader, a day trader, or a high-risk taker, these are great days. Swings in option markets, that go in your favor, can turn out quite profitable; risky, but profitable when you are on the right side of the stock, bond, or option trading. Most of us can’t handle the risk.

Current market action suggests a correction (usual range of 10 to 20% on the downside); corrections are standard and expected (although most investors do not want or expect them). The Dow Jones is about 6% off its high of 11670.

Stock market tops are often characterized by upward moves that lose ground when sellers drive it back down. We have had a number of days when the market has gone up and then down by the time of the close.

Days when the market is up and stays up for the day after a sequence of volatile days must be tested by the daily stock volume, or number of shares traded, before leaping back into stocks or bonds. A strong shift in the market is indicated by potent trading volume. During the past few weeks, we have had strong selling. The days of recovery have been on lower volume. Follow-through must come with strong trading volume.

Finally, it would be healthier for the market to correct/consolidate 5 to 10% and then build a boring sequence of trading days. On those days the trading might bore, volume and price change would be moderate as the markets build a base for a next move.

Keep an eye out for my comments on the role the Federal Reserve plays; the Fed trumps all market activity.

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