Monday, April 06, 2009

Qs Pivot Bands Update

This is a quick look at the Qs pivot bands going forward into this week.
Signs are actually bullish at these levels, despite all the technicals crying for a pullback.
Keep in mind data series 1-9 above are actually the R4-S4 levels + the PP = 9 data fields.
These are weekly data points, NOT DAILIES.

The Qs impulse indicator is not necessarily an indicator of price action, but pivot range volatility and the metrics of its construction have been discussed in detail previously. What the indicator is showing now is a bumping against the upper standard deviation level that has held for the last 25 weeks, suggesting that range volatility is about to contract and, hypothetically price will rise.
While this inverse relationship between volatility and price is considered by most traders to be a reliable tell for market dynamics, last week's strange behavior wherein the VIX and price trended together off and on for several days, left more than a few scratching their heads.
Adam also had some thoughts on this strangeness. Check out his spin.

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