Morning Volatility Report
Yesterday was a trend day down in the major indices. However, volatility was under the average. The Dow actually had a narrow range NR7 day.
All three indices had new 20 day lows. In the last 14 trading days, the S&P has had 9 days with new 20 day lows, a pretty high percentage.
There is only a negligible premarket gap, so no volatility clues there.
At the moment we are sitting just above the top of the S&P futures gap from October which was at 817.25. The gap below is large at 15.50 points. This number also happens to be the 20 day ATR (average true range) of the daily SP move. Interestingly, the Nasdaq COMP is still light years from the same breakaway gap off the October lows. It's at 1180.
After a trend day like yesterday, particularly since it was lower volatility, I'd expect to see more down into a high tick reading this morning. If this happens I'll be a buyer for a day trade. That does feel like it would be a little too easy, though. So perhaps we bounce here at the top of the gap (and it could be a powerful bounce) or globex low (814 on emini, 952.50 on NQ) or continue down to fill it more than I am expecting...
In any case, I'll be a buyer of morning weakness with a high minus NYSE tick reading, for a very short term hold. Otherwise I'll have to see what shakes.
The HMO.X and gold (XAU.X) indices both had wide range (WR4) days to the downside and are due for a rest.
