The lack of volatility in the markets these days has really been something to behold. If your EKG looked like an intraday chart of the S&P 500 recently, the doctor would probably be reaching for the paddles. The latest example of zero volatility in the market comes courtesy of the S&P 500’s intraday trading range. Over the last 50 sessions, the S&P 500’s average percentage spread between the intraday high and intraday low has been 0.540%. Going back to 1983, when our database of intraday data begins, there has only been one other time where the S&P 500’s 50-day average intraday range was narrower. That was back in early February 1994 when the average range got as low as 0.539%, so the current narrow range is close to a record. But it gets even better. Barring a big intraday move tomorrow (greater than 1% – an intraday range we haven’t seen since mid-December), the S&P 500’s average daily range will drop below the record low of 0.539% that has been in place for nearly a quarter of a century. Even the computers have gone fishing.
What makes the period of low intraday volatility even more amazing is that it has occurred in the middle of a Presidential transition, which is often a period of increased volatility, especially when the outgoing administration has been in office for two terms. Judging by virtually all of the media accounts, the current transition has been the most chaotic and disorganized in modern history, riddled with blunders coming from an inexperienced Administration, but through it all the market has been humming. So, who has it wrong? The markets or the media?