The great volatility is over

D

detective

We're going back to more normalized markets, those still banking on the volatility of October to continue will be sorely disappointed over the next couple of months. Many of the overleveraged and poorly positioned have been blown out, which explains the lower volumes the past several days compared to early and mid October. It was fun while it lasted, but like all good things, they don't.

The lower volatility will once again suck in the same suckers who think its safe to go back in to the shark infested waters thinking the rally has legs. Once they are in, then we'll go back down, not so quickly as before, but slowly and steadily for months.
 
I was also curious as to how volatility will play out with the elections around the corner. If we take out the lows of the market next week, i can see volatility being even crazier than last month going into the end of the year. If we manage to hold the lows and rally above 1050 in the ES, price swings will still probably be good but not as crazy as if we were to take out the yearly lows. Either way though, i still dont see volatility waning too much. Why would the volatility stop? The last few weeks have been volatile.....each week we had a 9%+ daily moves....what do you want?
 
I disagree, I think the volatility is here to stay for a longer time than most expect it to, I think we will stay volatile into at least the end of 2008 early 2009, so get ready for many more weeks of up and downs.....
 
I don't think that it's over I think the initial blast is over but a recession is still looming and it will still Continue to be a bit more volit than average
 
Its still here but at lower levels. You are just too impatient having to sit in your chair all day forcing trades and getting churned out.

This kind of post reminds me of a crack addict who goes off the shit for a week and goes crazy. All those profits eroding eroding eroding....
 
The market became so volatile because the move from 1100 to 840 was during a time of peak financial panic, total uncertainty about whether the system will hold and about possible depression. We have taken financial armageddon off the table, so there are more people willing to buy the dips intraday, and less people forced to sell. The forced sellers are mostly gone, the remaining traders and funds still alive are less leveraged and better positioned to weather the storm.

No, we won't be going back to the boring 2004-2006 volatility, but expect range bound trading, slower moves intraday, and even if we take out the lows, expect it to be more like July of this year rather than October.

I do agree that the volatility will still be good, like earlier this year, just not epic like October. October was an outlier month that won't be repeated for a long time.

Quote from tradingbug:

I was also curious as to how volatility will play out with the elections around the corner. If we take out the lows of the market next week, i can see volatility being even crazier than last month going into the end of the year. If we manage to hold the lows and rally above 1050 in the ES, price swings will still probably be good but not as crazy as if we were to take out the yearly lows. Either way though, i still dont see volatility waning too much. Why would the volatility stop? The last few weeks have been volatile.....each week we had a 9%+ daily moves....what do you want?
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