Monday, May 18, 2009

Stock Market Volatility Continues to Decline

Here we see that volatility in the S&P 500 market (SPY) continues to fall. The five-day average daily trading range (pink line) has moved steadily lower since the March lows and now stands below 2%. That is less than half the average range we saw earlier in the year.

Interestingly, though we're seeing some choppy volatility on a very short-term basis, the volatility on the day time frame has lessened. That means that we're getting more chop per unit traveled, a tough set of trading conditions for daytraders.