High Volatililty And Market Turns by William Brower, CTA
ARTICLE SYNOPSIS ...Does an increase in volatility indicate a market top? This
historical look offers some insights.
Back in 1994, it was exciting for
traders watching the Standard &
Poor's 500 index to get a true
range day of four full points or
better. These days, that small a
daily range is rare; instead, we
are becoming accustomed to true
range days that are 10 and 15 full
points. Is today's volatility unusually
high by historical standards?
And more important, can high volatility be used to
predict major market turns?
I wanted to look at data going back to the crash of 1929. I
chose the Dow Jones Industrial...