Market Structure Update

[Billy]

Once again, nothing new for robot subscribers.

http://blog.alphascanner.com/?p=789

Billy

[adam ali]

Billy,

I saw somewhere that ATR has been descending for some time, an important piece of market structure and the Robots. I'd be interested in your thoughts - thanks.

[Billy]

Billy,

I saw somewhere that ATR has been descending for some time, an important piece of market structure and the Robots. I'd be interested in your thoughts - thanks.

Adam,
IWM’s ATR has recently been hovering between 2.5 and 3% and stands today at 2.78%. This is much lower than the 5+% seen last summer but still above bull market’s norm of 1.5 to 2.5%.
It is heading in the right direction and improving the reward-risk setups on the long side for all market participants. Professional algorithms are programmed to take advantage of that evolution. The robot can also decrease progressively its worst-case stop risk accordingly.
If the robot settings turn contradictory, an increase of ATR would actually be bullish if it happens with rising instead of declining price.
Even the VIX is confirming lower volatility, trading below the “fear” threshold of 30 for several days in a row for the first time in a long while. A decisive drop below 24 would set up the ideal conditions for a market rally.
Billy