We can think of a range market as one in which there is neither sufficient news nor sentiment to move asset classes in a directional fashion. For that reason, when we see one asset class trading in a range, it's not unusual to see ranges in correlated assets. Thus, for example, we saw ranges in the ES futures (top chart); euro (middle chart); and gold (bottom chart) today.
Yesterday, however, we saw the euro move sharply higher against the U.S. dollar in early trading; gold and oil trading significantly higher; and stocks move higher overnight and through the trading day.
The shift from yesterday's trending mode to today's range one requires considerable mental flexibility from traders. It means treating each day session as informed by previous days, but separate from them. This enables us to stand back in early trade and gauge unfolding day structure, so that we can effectively frame market hypotheses and trading ideas.
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