While the market continues to log extended directional runs in a relatively high volatility environment, you may have noticed the recent dramatic reduction in average daily range. The charts below track the cumulative absolute change in daily S&P 500/SPY price over the course of the last trading year.
While granting the major ‘reset’ in valuation that occurred last August likely remains in play, this reduction in daily range could ultimately represent one sign of a return to normalcy, and I will be tracking it closely in the months ahead.
