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A relief rally for the S&P/ASX 200: but will it last?

The ASX is on the way up today, but it’s by no means been smooth sailing.

Local investors enjoyed a strong relief rally early in today’s session, watching the S&P/ASX 200 (Index: ^AXJO) (ASX: XJO) rise more than 1.6% to 4,998 points. The optimism soon faded away before returning once again with the ASX 200 sitting 1.4% higher around lunchtime.

BHP Billiton Limited (ASX: BHP) has managed to regain favour with investors after Glencore’s shares recovered some of their losses in London overnight. BHP’s shares are up 1.5% around lunchtime with Rio Tinto Limited (ASX: RIO), Fortescue Metals Group Limited (ASX: FMG) and Woodside Petroleum Limited (ASX: WPL) also up 2.6%, 5.1% and 2.4%, respectively.

Commonwealth Bank of Australia (ASX: CBA) is also providing plenty of drive. The bank’s shares rose 3.1%, making it the top performing Big Four bank. Australia and New Zealand Banking Group (ASX: ANZ) and National Australia Bank Ltd. (ASX: NAB) were up 1.8% and 2% while Westpac Banking Corp (ASX: WBC) lagged behind with a 1.3% jump.

Although today’s gains are certainly a welcome relief for investors, the reality is that investors simply don’t know what to think right now. One day, the market falls almost 4% on the back of global economic concerns, and the next, it surges higher for no solid reason. The high level of volatility is playing with investors’ emotions and many are likely considering getting out in case of further falls.

That feeling is a natural human instinct, and one that has caused many individuals to lose out on their investments when times get tough. Although I won’t claim to know what’s going to happen to the market tomorrow, next week, or even next year, I do know that the high levels of volatility experienced recently are not normal, and that investors need to simply wait out the turbulence for better days.

Sitting on your hands and doing absolutely nothing may be the best decision you could make right now.

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Motley Fool contributor Ryan Newman has no position in any stocks mentioned. Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. You can follow Ryan on Twitter @ASXvalueinvest.

The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.