A Lot Of Volatility for a Market Headed Nowhere
In the last six days we have seen daily volatility on the S&P 500 equal 23 percent of the yearly range. All of this is occurring in what we feel is a price distribution environment, a year when annual volatility is only 66 percent of average. Some possible reasons may be:
1) There are widely opposing ideas of where the market is headed throught the end of the year. There are bulls and there are bears, with the end of the year projections ranging from 950 to 1450 on the S&P. What if the answer is 1235, the median of the year to date?
2) The range for the year on the S&P is 1101 to 1370 with the median at 1235. If one breaks that range into quartiles that makes the numbers 1101, 1168, 1235, 1302, and 1370 relevant. Backing off a bit to 12 percent inside the range provides a range of 1134 to 1335 as a practical trading range going forward.
Go for it traders.