Monday, October 11, 2010

Low Volatility, Low Volume

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The stock market is quiet. The average trading volume is quite low. There are no economic news today. Te only economic event for tomorrow is "Minutes of FOMC Meeting".

This is options expiration week (October's options will expire on this Friday) and usually options week is accompanied by volatile trading. The odds are good that we may see similarly quiet trading by the end of the session.

However, keep in mind that moments of very low volatility are also known in technical analysis as "Market Squeezes" and usually are characterized as "Silence before storm" and are noted before strong moves.

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