Definition
Giving too much weight to what just happened and assuming it will keep happening.
The story
After three green days, a fourth feels certain; after a crash, another one feels around every corner. Recent events are vivid, so they crowd out the longer history. That's part of why we keep five years of the record, not just last week.
Why markets watch it
A longer look back is one counterweight to the last few days.
Connects to
We explain why it moves markets. What you do with it is your call. Commentary and education only. Not financial advice. All terms