Dow posts best quarter to start a quarter since 1938

The Dow posted its best returns to start a quarter since 1938, as investors clawed back early losses Wednesday. It's all upside from here, and traders might think we've hit the low.

Let's have a frank discussion about market statistics before you get too excited.

The headlines that begin with the best or worst are dominating financial media today as they have had many days this year. This is to be expected when volatility rears its head. The days with the best historical returns tend to cluster with the worst. It seems that the market gods are simply flipping coins.

The key is to distinguish true signals from noise. Most of the price gyrations are just noise, while the public is focused on price gyrations.

True signals can be hard to identify and they appear rarely. We started the week with a two-day gain, marking the first time that the S&P 500 posted back-to-back gains of over 2.5% since the Global Financial Crisis in late 2008.

The big gains from the resulting bull market came substantially after a cluster of signals in 2008, so this information may not have been useful to investors trying to time the low.

In September 2008 there were two back to back 2.5% up days — fairly early on in the bear market. But buying that event was a clear loser, as the index reversed strongly to the downside.

Three sets of similar back-to-back gains came in late November and early December. These were close enough to the low that they may have been useful for longer-term traders. But had investors bought after those gains, they wouldn't have made money until about five months later — an eternity for shorter-term punters. We see two instances of this 2.5% two-day thrust signal in the wake of the dot-com bubble bursting in 2000, as a result of market history. In April 2000, one instance came close to the all-time high and the other caught the price bottom perfectly in October of 2002 - two years later.

We're waiting for the inflation data to cool so the Fed can stop raising rates. That certainty might calm the markets, leading the way for them to rise again. When a clearer picture emerges, we'll need cash to buy what many view as a generational opportunity to get stocks on the cheap.

If you're investing according to a predefined investment plan, that's fine. The riskiest action we can take is to get caught up in the headlines and burn through our liquidity before this bear decides to hibernate.

Labor shortage: You have to start thinking that robots can do some of these jobs,'' he says.

Expert says that housing brought to its knees by the Federal ReserveFederal Reserve is brought to its knees.

Oil: We're going to see $65 before we see $100' in the WTI,'' analyst says.