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Are YOU Prepared for A Quiet Market?

It appears that the shenanigans from the US Government will be dying down, at least until February.

So what headline risk does that leave us with?

Other than your run of the mill economic data and an earnings season, there's not much in terms of macro risk.

And in a month we'll be heading into holiday trading.

Let's have a look at the markets, along with the volatility that has occurred over the past month:

spx

With all that happened over the past month, it brought the HV up to around 13.

It then follows that since the near term market risk is gone, this HV reading is unsustainable and will head lower.

What does this mean?

Fewer market gaps.

Tighter intraday ranges.

More of a grind.

As a trader you've gotta be prepared for this. It means you can put on a bit more size on index bets, but it may just be a better idea to go into income trades.

And with a low volatility market, correlations will go lower, which means stock picking will still be a good game to play.

 

by Steven Place

Steven Place is the founder and head trader at investingwithoptions.com/