December 12, 2006 Stock Market Recap

It was pretty uneventful when all was said & done today. The indices did their typical post-Fed decision gyrations and closed within their recent ranges. We’ve got options expiration this week so maybe that will get things moving.

Looks like there’s not much to do on the Nasdaq but wait for that symmetrical triangle to be broken. The Bollinger Band Squeeze signals a upcoming volatility expansion (range contraction leads to range expansion):

One use of the Bollinger Band study is to indicate when the market has entered a narrow trading range. A narrow range indicates momentary balance between buyers and sellers. As the trading range becomes narrower, and the market volatility lessens, the spread between the Bollinger Bands becomes smaller.

I’m going to call the Russell & Nasdaq short term trends “lateral” since they’re so close to their 10-day moving averages. They both closed below those averages but they’re so close that I’d just call it noise.