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Markets failed to hold onto their gains Thursday amid mixed economic signals.
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NEW YORK (CNNMoney.com) -- There's a saying among basketball fans that you need to watch only the last five minutes of the game. These days, that's the case on Wall Street.
Lately, 3 p.m. is the time when either market rallies die or big sell-offs turn into nice pops.
On Thursday, for example, the major indexes all opened higher, dropped sharply in the final hour and hit their low points of the day shortly before the close. The same thing happened Tuesday.
The last hour isn't always bad, however. The markets recovered from a tough start Wednesday - the Dow was down nearly 180 points at one point -and closed higher.
And then there's the wackiness that ensued on Jan. 23, the day after the Fed's emergency rate cut. The Dow was off as much as 326 points early in the day but thanks to a stunning rally in the final hour, it wound up closing higher by nearly 300 points.
What gives? Jack Ablin, chief investment officer with Harris Private Bank in Chicago, said that he believes the last stretch of trading is dominated more by institutional investors than individual investors.
So the "smart" money (not to mention big money) is creating these wild end-of-the-day swings. And interestingly, it appears that average investors and big mutual funds and hedge funds don't agree about where the market is headed.
This worries Ablin. "There is a tug of war between retail and institutional investors. It's emblematic of the confusion going on. The economic outlook is so cloudy that it creates an environment of uncertainty," he said.
But Rob Stein, managing partner and senior economist with Astor Asset Management, an investment firm in Chicago, said the market really hasn't been all that volatile if you look at what it's done over the past few weeks.
Even though there have been big moves on a day-to-day basis, stocks are still around the same level as they were following the Fed's emergency rate cut.
The S&P 500, for example, closed at 1338.60 following the rally on Jan. 23. Yesterday, it closed at 1342.53.
"If you step back, the market appears more volatile than it really is because the ranges of the moves are so much bigger. But we've really done nothing since the Fed came to the rescue," Stein said.
So what's next? It depends on your stomach.
Ablin said investors should hold out for more clarity about the economy to emerge before buying stocks.
"Average investors should wait until at least April or May. It's like jumping in the swimming pool without knowing what the temperature of the water is," he said.
But Stein believes that if you can deal with some of the daily gyrations, this is exactly the time to jump into the market since he thinks there are many long-term values.
"We have a jittery market and if you don't like that, sit on the sidelines. But whenever the market falls as much as it has over the past few months, it's usually a good time to buy," he said. "Stocks go up over time. You have to ignore the short-term fluctuations."
That is sound advice. But keep in mind that if you want to test the market waters now, it might be a good idea to have a trusty bottle of Pepto-Bismol handy if you want to see how your portfolio is doing around 3 p.m.
No Buzz for the next two weeks. A quick note to readers. I'm taking some time off the next two weeks. So the Morning Buzz will be on a temporary hiatus. I'll be back March 10. Until then, good luck with your investments!