Wall Street’s Super Streak>“The direction of the surge has been up and down, but mostly up…Despite the delirium, however, nagging questions remain: What, if anything, do the sound and fury in the stock market signify? Why the incredible, almost insane, trading volume? Is this a suckers’ rally or the beginning of a sustained bull market? Why has the momentum been so strong when the prospects for economic recovery are so uncertain?

Sudden moves in the market have often come at dramatic turning points in the course of economic policy. On Nov. 1, 1978, the Dow Jones average gained 35 points after President Carter unfurled a dramatic plan to shore up the value of the dollar in international commerce. On Oct. 6, 1979, the Federal Reserve Board announced a historic policy change by adopting a more monetarist approach for controlling the U.S. money supply. That had the immediate impact of sharply boosting interest rates. Within a week, the Dow dropped almost 59 points.

Two weeks ago, many investors sensed that another economic watershed had been reached. Inflation had slowed dramatically, interest rates were falling and Congress finally passed a $98 billion tax-increase bill designed to reduce worrisome budget deficits. Suddenly there was strong new hope that Reaganomics might work to pull the American economy out of its stagnation.

Even so, the market is still edgy and extraordinarily volatile. Persistent fears about the future of the economy have restrained the bulls from running free.”—Time, September 6, 1982

With the Dow and S&P 500 on track to close up over 5% today, keep in mind that despite recent gains, the market is still extremely volatile like in 1982. Don’t give in to the temptation to change your financial plan drastically based on the market’s performance during the last 10 days. Think long and hard about whether its emotion versus logic that’s driving your decision making.