I was calculating the daily ATRs today, for my position sizing going into First Quarter, and it was an eye opener as to how much the average daily range has incresed in each market relative to 6 months ago and 12 months ago. Now - here is the kicker:
The SP cash daily chart is at a perfect equilibrium level. (draw trendlines, see point of triangle) The daily ADX reading is the lowest it has been in a year. The weekly ADX is the lowest it has been in 2 1/2 years.
hmmmmmm
To top it off, the daily cash Russell chart is on a power sell. (oops - that means it completed A-B-C correction in a downtrend).
Weekly Bear flags on the dollar, Weekly bull flags on gold, one thing appears certain - volatility and expanding ATRs should make January a traders dream. (*Note: a traders dream can at the same time be an investor's NIGHTMARE).
Stay tuned, same bat time, same bat channel in 2008.....