Note how volatility (average daily high/low range for SPY over a moving five-day period; red line above) has been coming down during the lead up to the holiday, as prices have been breaking out to the upside. Eventually, particularly with the holidays behind us, we will see a mean reversion in volatility and a pickup in market movement. I will be tracking the correlation between volatility and directionality moving forward, as this will provide us with insight as to whether we move back into the multiweek trading range vs. melt up to significant bull highs.
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