Narrow Range Days and Inside Days

Discussion in 'Trading' started by inandlong, Aug 15, 2003.

  1. This has to have been one of the most uneventful options expirations in quite some time. I expect when I run a scan that there will have been a large number of narrow range and inside days today. Significance? It is my unstudied, untested, unfounded theory that days like this beget wide range days. And when a large number of stocks fall in this category, then the broad indices have big days too. Looking for Monday to be a big day.
  2. I look forward to Monday :D

  3. I just ran the scan for the Dow components and the big 3 major indices. The Dow was a NR7/ID, the other two were NR7's. And actually as with the stocks, the number of days is probably larger, but I just check the popularly followed strategies.

    Of the Dow components, 18 stocks fell into one of 4 categories, NR7/ID, NR7, NR4/ID, NR4.

    12 were NR7's, with 5 of those being NR7/ID's.

    6 were NR4's, with 3 of those being NR4/ID's.

    Many of these stocks had one or more narrow range days earlier this week, so those that also had narrow range today, would have been like dbphoenix said on another thread, "really really" narrow range.

    So either the market is going to stop trading altogether, or volatility will expand.
  4. The day isn't over, but certainly there has been an expansion in volatility. Maybe not much, and I haven't looked at the charts of the NR/ID's from Friday, but there has probably been a few cents of profit opportunity available on these stocks.

    I was busy with another task when I pulled up the JNJ chart about 30 minutes ago. I was going to post a 'Wow look at that pattern on the daily', but I forgot. But now look at it. So it might go somewhere, or might not, but with the NR/ID setup, at least you had some notice.