Wide-Ranging Days
Wide-ranging days have a true range that is far larger than the days on either side and are especially meaningful after a strong trend. Jack Schwager (Technical Analysis) uses the Volatility Ratio to identify wide-ranging days.
- After a sharp down-trend, a wide-ranging day with a strong close is a signal that the trend will reverse.
- After a strong advance, a wide-ranging day with a weak close signals a downside reversal.
Extreme wide ranging days often precede a major trend reversal.
Author: Colin Twiggs is a former investment banker with almost 40 years of experience in financial markets. He co-founded Incredible Charts and writes the popular Trading Diary and Patient Investor newsletters.
Using a top-down approach, Colin identifies key macro trends in the global economy before evaluating selected opportunities using a combination of fundamental and technical analysis.
Focusing on interest rates and financial market liquidity as primary drivers of the economic cycle, he warned of the 2008/2009 and 2020 bear markets well ahead of actual events.
He founded PVT Capital (AFSL No. 546090) in May 2023, which offers investment strategy and advice to wholesale clients.