Volatility has dropped to historically low levels, which should be flashing a caution signal. However, we may well see this low volume, low volatility environment continue into September. I clearly remember thinking during previous Augusts (when this type of environment develops) that it can’t last long. Almost invariably it lasted longer than I expected.
Anyway, the market is set to move in one direction or another. If it is up, these high tight flags may soar.
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