“Experience is not what happens to a man. It is what a man does with what happens to him.” -- Aldous Huxley

Wall Street made a nice little recovery on Friday, as positive jobs numbers helped bring the major indices a lot closer to break-even for a week that seemed destined to end up substantially in the red.

“You must live in the present, launch yourself on every wave, find your eternity in each moment. -- Henry David Thoreau

Well, that party didn’t last long, and the hangover was on the nasty side.

Wall Street had a few days to entertain a little early-week exuberance as a couple of Fed-centric news cycles spurred the equity market towards yet another round of record highs. That exuberance, however, was severely “tapered” when a conflicting message from another Fed officer sent the market reeling towards steep losses, cutting into its midweek gains.

In terms of volatility, what a difference a month makes.

Back at the beginning of August, the Chicago Board Options Exchange Market Volatility Index (VIX) was hanging around its low point for the year, ending the week at just a shade below 12. But the worm seems to have turned these past four weeks as the VIX, inevitably referred to as the “fear index,” has climbed over 40% since then.

The market is currently in a nice little comfort zone, touching on record highs on a regular basis. In spite of that fact, it has more or less been in a sideways trend these last four weeks, which tends to beg the question: Is the market consolidating for a breakout or about to lose steam and head into reverse?

That remains to be see, though there are reasons to think that the low levels of volatility the market currently is registering will start to rise fairly soon.

Wall Street presently seems to be in a sideways state of mind, with the major indices traveling predominantly horizontal these last couple of weeks. Not a surprise, really, as the news cycle has been relatively tame and the current earnings season largely followed the predicted script.

So for investors, the question is whether the market is consolidating for a push into yet another round of record highs or simply running out of steam and veering towards an inevitable correction. And, with a busy week on tap, the year’s bullish uptrend gets yet another opportunity to be tested, and the consolidation-vs-reversal question gets yet another look.

So far, July is looking pretty sweet for those investors who have decided to swap the pleasures of the beach for an extended Wall Street voyage through the summer.

For the moment at least, the market seems to be righting its ship after a fair amount of buffeting following Ben Bernanke’s comments regarding the Fed’s intention of tapering off its ambitious bond purchase program.

Apparently, investors have been comforted last week by his new and improved comments, the ones offering reassurance that the tapering isn’t quite as imminent as he first indicated, and that he is really, really advocating for continuing the money stimulus along its current trajectory.

OK, it’s earnings season again, though the first round of reports this week won’t reveal a whole lot, at least not until Friday, when J.P. Morgan (JPM) announces its Q2 results. Then, things could get interesting, as investors will decide if bottom-line fundamentals are enough to supersede the recent Fed hullaballoo that centered on the question of when, not if, the central bank would begin to taper its massive bond purchasing.

Volatility has, indeed, calmed down a bit last week, compared to the previous one, as some soothing words from some of the Fed’s top monetary policy officials seemed to balance off Ben Bernanke’s earlier comments regarding the imminence of QE3 tapering.  It did seem to be an orchestrated attempt by Fed officials to stabilize the markets following the strong negative reaction that occurred in response to Bernanke’s comments that the bond-buying program would be reduced much sooner than investors had anticipated. If this was the intended reaction it worked . . .

It was another week of wild mood-swings on Wall Street, as Ben Bernanke seemed to be intent on roiling the markets. Deliberate or not, the effect was the same, as investors seemed hesitant to jump in on the dips with the same enthusiasm that they have for the majority of the year so far. The question is, will the volatility express continue to barrel through the summer vacation months?

The last couple of weeks has seen Wall Street moving in something of a sideways trend, though that hardly indicates the increased level of intraday volatility that the equity market has been experiencing since the last week of May. Will it be more of the same for the coming week? Bet on it . . .