Dow Activity Decelerating...For How Long
I don't think it escapes anyone's attention that market activity levels (volatility) are exceptionally low compared to recent history.
The VIX dropped below 17 and the innate activity levels on the major indices (like the ATRs) have followed the same course. The medium-term activity reading on the Dow (20-day) has dropped to the lowest levels since before the market topped and reversed at the beginning of 2022.
That marries nicely to the very narrow range that the blue chip index has made recently. The
DJIA
cleared the smallest three-day range in a long time this morning with the gap down, but it probably isn't signaling 'breakout' follow through expectations for many outside of those with 5 minute time frame charts.
What is remarkable to me is that the activity levels are still decelerating - meaning short-term volatility is still dropping faster than medium-term. Here is the ratio of the 5-day (1 week) to 20-day (1 month) ATR ratio. There is natural 'mean' to this acceleration/deceleration.
The VIX dropped below 17 and the innate activity levels on the major indices (like the ATRs) have followed the same course. The medium-term activity reading on the Dow (20-day) has dropped to the lowest levels since before the market topped and reversed at the beginning of 2022.
That marries nicely to the very narrow range that the blue chip index has made recently. The
DJIA
cleared the smallest three-day range in a long time this morning with the gap down, but it probably isn't signaling 'breakout' follow through expectations for many outside of those with 5 minute time frame charts. What is remarkable to me is that the activity levels are still decelerating - meaning short-term volatility is still dropping faster than medium-term. Here is the ratio of the 5-day (1 week) to 20-day (1 month) ATR ratio. There is natural 'mean' to this acceleration/deceleration.