The S&P500 had its worst day in two years on Tuesday, after monthly US CPI data dashed hopes that inflation had peaked, and investors were reminded that the path of monetary tightening is likely to remain steep.

The ASX200 had a similarly terrible day, falling nearly 3% at the open on Wednesday, and closing down more than 2.5%. It stabilised on Thursday, but such is the current level of volatility, is actually flat over five days. Investors can be forgiven for finding the whipsaw exhausting; volumes are relatively modest when compared with earlier periods when the market fell similar amounts.

Clearly many have learned that ‘buy the dip’ is not a foolproof strategy; alternatively, the dip has simply not been big enough to tempt many to part with their cash!

ASX200 (XJO) over five days

For those who were willing to come out and play on Wednesday morning, the Vanguard Australian Shares ETF (VAS) was a huge buy, over 95% by value. This has become a consistent trend on days when US markets have suffered big hits overnight; investors are keen to buy the index at a discount and will add to their holdings. The average sizes for this trade are not particularly large, as it tends to be an accumulation strategy, rather than an all-in.

Higher conviction investors were buying the Betashares Strong Bear Hedge Fund (BBOZ) and also ETF Securities Ultra Short Nasdaq Hedge Fund (SNAS), the first time the latter has appeared in large volumes. A smaller number were buying international indices.

For those willing to stay with direct stocks, materials remain the most favoured sector by a substantial margin. While Fortescue Metals Group (FMG) is the gift that keeps on giving for those who closely track the iron ore price, Pilbara Minerals (PLS) continues to be traded in huge volumes. The stock has crashed straight through its 52-week high and has barely taken a breath in recent weeks, delivering great returns for a wide range of holders.

Pilbara Minerals (PLS) shares over 12 months

South32 (S32), rarely high in the numbers, saw huge buying on Thursday after falling more than 7% as it went ex-dividend. Lithium stocks remain hot, with Lake Resources (LKE), Allkem (AKE) and Core Lithium (CXO) still finding buyers.

Weakness usually brings out buyers for the financials sector; interestingly Macquarie Group (MQG) and Magellan Financial Group (MFG) were two of the top picks. Magellan has been under sustained pressure over the last 18 months, and any rebound in the share price hasn’t been maintained, although it is about 10% above its recent lows. Many are hopeful that the worst of the news is priced in, and there is an opportunity for the firm, and the stock, to rebuild from this point.

Magellan Financial Group (MFG) shares over 12 months

On international markets, recent volatility has given committed traders an opportunity to take directional bets on the US market. Oil, semiconductors and even China ETFs have been traded actively as traders seek to eke out profits in choppy markets.