Volatility has increased dramatically over the last 2 months with barely any net movement on the SP500 since September (+20 points). In the last 2 months we have seen a series of straight up and down moves that last 4-7 days. December started with the SP500 pulling back -5.14% in 7 days, followed by a +6.13% in the following 8 days, then down -4.68% in the next 5 days, up 2.9%, down 3.58%, for net move of -4.06% (1/30 close) since 12/5/14 and flat since September.
For swing traders who have a time frame of 0-20 days getting bullish when the market finally feels right has been wrong and getting bearish when the market feels sluggish has been wrong as well. One may consider shortening the time frame to day trades and or look for mean reversion trades, look for reversals from stocks down or up multiple days in a row, preferably high priced stocks.
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