Monday, December 6, 2010

Extreme Narrowness!

A very narrow range session was traded on Monday. This puts us in volatility contraction mode. Volatility is mean reverting, and therefore we should be watching for range expansion as early as Tuesday.

I'm still watching for a pullback based on the VIX and overboughtness of the market, but that doesn't mean we can't jsut shoot straight up from here. If we do, I'll miss it as I'm waiting for a "safer" entry.


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