Every week I calculate working ranges for each index based on the 14-period average true range. These levels are used in conjunction with auction theory to form the win/loss scoring for my model. These calculated levels also tell me a story about the market.
When we blow above or below one early in the week it can mean the market is changing, becoming more volatile. Sometimes the NASDAQ will hold while the Dow Jones breaks, telling me where participants are more interested in investing, etc.
This week I was perturbed because my analysis suggested the Dow would be the most resilient, and it turned out to be the weakest.
However, heading into the weekend, it appears to be holding its lower bracket, and I like that…see below:
