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Thursday, 20 Dec 2018
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Volatility Not Our Problem

CAN’T CATCH A TRICK

Wall Street was doing so well for a minute there, at 6 AM this morning it was up 382 points. The Fed decision comes out, and it drops 895 points in an hour to hit a new year low. We just can’t catch a trick.

This is the Dow Jones overnight.

We are getting dulled to stock market volatility. Here is an interesting chart of the Dow Jones over the last 20 years showing the 14 day Average True Range or ATR of the Dow Jones on a daily basis. This simply shows the average number of points from top to bottom (the trading range) of the Dow Jones each day averaged over the last 14 days. You can see that the average trading range of the Dow Jones over the last 14 days is currently at 561 points.

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