VOLATILITY
Food for thought; the SPY traded in a range of 46 cents on Monday and Tuesday. Yes, the high of both days was 132.77 and the low was 132.31. Generally, the SPY trades in a range from high to low for one day of over one dollar, so the range of yesterday and today is very low and very unusual. The QQQQ traded no differently as its range from high to low for the two days was 31 cents.
The adage is that volatility is mean reverting so one would expect volatility to increase shortly. Today is Fed day so maybe we get the volatility we want after the 2:15 announcement.
One thing to keep on the radar; the gap up on Friday. That gap is still in play and today could be the day it gets filled. The gap needs to get to the 131.5 area on the SPY to fill and that is one buck of volatility right there.
posted by DAVID at
7:20 AM
1 Comments:
A lot of people are paying attention to volitily this morning and clearly we are in for an increase post the fed anouncement; I would offer this:
The market IMHO, to reuse a FED mantra, is data dependent today (Boom Boom lips dependent). To me, I would be paying attention to the bond markets behavior pre-anoucement (given Bond traders are a bit keener about predicting Fed behavior).
Up or Down, I agree the move will be large; I would hate to be on the wrong side of the trade:).
-tc
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