Any explanation as to why the pre-market has been showing greater volatility (and large price ranges) vs. normal trading hours...? I'm starting to fear going to bed, PST here for me. Seems to kick-in around 12:00 am PST. *shrug*
Markets are more globally interconnected than they've ever been before. Thus, traders and/or auto systems are reacting with big ranges to any key event (e.g. economic, FED/ECB, political, financial, severe weather et cetera) occurring elsewhere in the world. Just take a look at any swing point or strong continuation price action in that overnight trading session you see and you can line up "most of them" at/near the time of a key event. In contrast, others are price reactions to technical reasons. Mark
Because the information content of trades from the overnight trading is not reflected in prices until after the open.
I guess what I'm trying to puzzle out is why the larger price action, on small volume, in after hours/ pre-market action? The price ranges seem to be counter trend or more expansive( when in trend) as compared to normal trading hours. This has me puzzling how to incorporate these moves into my day trading plan. So, I'm curious if others have noticed this seemingly recent action(as compared to just 6 months ago)...? It's as if the "set ups" are head fakes, or the moves run out, before the market opens.