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The Deipnosophist

Where the science of investing becomes an art of living

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Location: Summerlin, Nevada, United States

A private investor for 20+ years, I manage private portfolios and write about investing. You can read my market musings on three different sites: 1) The Deipnosophist, dedicated to teaching the market's processes and mechanics; 2) Investment Poetry, a subscription site dedicated to real time investment recommendations; and 3) Seeking Alpha, a combination of the other two sites with a mix of reprints from this site and all-original content. See you here, there, or the other site!

26 July 2005

Volatility and non volatility

The odds are high the culmination of a move will itself be volatile, if the follow-through to a breakout occurs in a non-volatile, low volume manner. Typically, volatility begets non-volatility, and non-volatility begets volatility.


[click to enlarge]

In the instance of Dominos/DPZ, odds are good the rally into the $27-30 short term objective will end with a flourish, in volatility. This is due to the insufficient volatility (2) after the breakout (1), and would signal the moment to sell trading positions. (Only to re-enter upon the conclusion of the short term decline, measured against the ultimate price move.) More anon, if necessary.

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