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Strategies & Market Trends : DAYTRADING Fundamentals -- Ignore unavailable to you. Want to Upgrade?

To: TFF who wrote (14710)	11/17/2001 5:50:08 PM
From: KymarFye	Read Replies (1) \| Respond to of 18137

"With the decreased volatility in small issues..." Care to provide some examples? My own cursory examination of popular tradables suggests that, to the contrary, volatility in small, middle, and large issues alike remains at very high levels by objective measures. In terms of "Historical Volatility" or average range of daily moves (measured in percentages of price and excluding gaps), stocks like CHKP, EBAY, QLGC - among many others - do remain below the crash spikes made around March-April 2000 and then exceeded during the Winter 2000-1 period, but such measures applied to current conditions remain higher, in many instances significantly higher, than normal for other periods, including the the great blowoff run when day-trading was "cool." There's lately been as much or more to trade on any given day than during almost any time during 1999. Just to use the QQQ and the COMPX as examples: the 50-day average tradable range (from high to low) of the QQQ measured on November 16, 1999 was around 2.4%. 100-day annualized volatility was just under 30%. 6-day volatility was just under 25%. On 11/16/01, the comparable measures were 4.16%, 55%, and 25 - generally about halfway between bull run levels and those registered a year ago when the post-Labor day slide was giving way to the post-Election crash. For the COMPX, the numbers for 11/16/99 are 1.6, 30, 18; 11/16/01 yields 2.8, 42, 19. Prior to 2001, the COMPX didn't reach 2.8% average daily tradable range until just before the March 2000 peak. The LOWEST measure for 2001, 2.49% during the Summer doldrums, is actually just a tick or so higher than the HIGHEST measure registered in all of 1999 (2.48% in early June). In short, when you get up in the morning and turn on your computer, today's Nasdaq offers you, on average, 50% more of a range to work with than it did when everyone in the world wanted to get rich quick off of it. Individual stocks offer a lot more to trade, of course. On the "better" stocks, there's often around 100% more to look for. What people and some traders miss, I think, isn't "volatility" or even true tradability. What they miss is a bull trend - a market moving so strongly in one direction that it made beginners believe that "trading" meant throwing money into the pot in the hopes of catching (yet another) dramatic-looking move to the upside - setting aside the fact that a good piece of the move was probably eaten up by a gap, and that the "drama" of the move was distorted by inflated prices: The jump from 200 to 210 somehow fed the general excitement more than a move from 20 to 21 (or 21 to 20) seems to. Though there may be range and volatility levels may eventually contract significantly, it hasn't happened yet. In the meantime, I see little reason to believe that daytrading should currently be less practicable than during other periods.