Intraday “travel” is increasing

One of the changes in market behaviour that often appears near inflection points is an increase in the intraday range,

The market may show relatively little movement on a daily basis, from close to close. But the distance the price “travels” in the course of the trading session starts to get longer and longer.

We are seeing something like that development in the S&P futures in the last few weeks. The back-and-forth movement is a reflection of the increasing struggle between the buyers and sellers.

Here is the 60-minute chart of the ESH5 futures contract in the first four days of this week (week of Jan. 12). So far the intraday range has moved through more than 380 points in four trading sessions.

Swings that wide are maddening for longer-term investors. For short-term traders they are pure profit. It is much easier – and much more profitable – to trade those wide swings than the slow steady climb for the top that preceded it, when the total range for the week was often less than 100 points.

ESH5 60-minute bars to Jan. 15, 2015150115-ES-60